GGBrochure 2023 WEB

OECD WORK ON
GREEN GROWTH
January
2023
OECD WORK ON
GREEN GROWTH
Table of contents
1 OECD at a glance
2 What is green growth and why do we need it?
9 SPOTLIGHT—Navigating the twin transitions: Going green and digital
11 Green growth indicators
15 Green growth in country policy surveillance
19 Fiscal policy and green growth
23 Environmental policies and economic outcomes
27 A green transition that leaves no one behind
35 Behavioural insights for green growth
37 Greening SMEs
39 Green finance and investment
45 Trade and green growth
49 Innovation for green growth
53 SPOTLIGHT—Green innovation and the impacts of economic shocks
54 Green growth of key sectors: energy, transport, agriculture, industry, tourism and the ocean economy
69 A nature-positive economy: biodiversity, ecosystem services and water
75 Greening regions, cities and communities
1
OECD at a glance
W hat is the OECD? The letters stand for Organisation for
Economic Co-operation and Development. Those words,
broadly speaking, sum up what the Organisation does. For more
The OECD currently includes 38 member countries. Brazil, Bulgaria,
Croatia, Peru and Romania are accession candidate countries. Brazil,
the People’s Republic of China, India, Indonesia and South Africa
than 60 years, the OECD has been providing a forum in which are OECD Key Partners. The OECD also collaborates with more than
governments work together to seek solutions to common problems, 100 other economies, many of which participate in its committees
share experiences and identify best practices to promote better and adhere to its instruments.
policies for better lives.
The OECD has helped forge global standards, international Australia Japan
Me mbe r countr ie s
conventions, agreements and recommendations in areas such as Austria Korea
governance and the fight against bribery and corruption, corporate Belgium Latvia
responsibility, development, international investment, taxes, Canada Lithuania
environment, agriculture, to mention a few. The OECD also looks Chile Luxembourg
at issues that directly affect the lives of ordinary people, such Colombia Mexico
as school and health systems and jobs. Co-operation, dialogue, Costa Rica Netherlands
consensus and peer review drive the OECD as it seeks to fulfil its Czech Republic New Zealand
vision of a stronger, cleaner, fairer world economy and society. The Denmark Norway
OECD is a source of advice on almost all areas of policy making Estonia Poland
and implementation, and one of the world’s most trusted sources Finland Portugal
of comparable statistical data. It carries out its mission thanks to France Slovak Republic
over 200 committees and working groups of national experts and Germany Slovenia
decision makers, and a high-quality permanent Secretariat. Greece Spain
Hungary Sweden
Iceland Switzerland
Ireland Türkiye
www.oecd.org/about Israel United Kingdom
© OECD 2023 Italy United States
OECD WORK ON Green Growth 2
What is green growth and why do we need it?

G
lobal momentum toward sustainable development has been renewed by the adoption of the 2030 Sustainable Development Agenda,
the Glasgow Climate Pact, the Kunming-Montréal Global Biodiversity Framework, and the UN mandate to negotiate a legally binding
global instrument to end plastic pollution. At the same time, the effects of Russia’s large-scale unprovoked aggression against Ukraine have
been severe and came on top of an already fragile and heterogeneous recovery from the COVID-19 pandemic. Across the world, people
are concerned about energy and food security and affordability, restarting and “building back” domestic economies, and inequality. With
the 2030 deadline for the SDGs on the horizon and the window to meet the 1.5 degree target of the Paris closing quickly, it has never been
more important to align policies for environmental protection, economic prosperity and social equity.
Russia’s invasion of Ukraine has resulted in a number of immediate Global material use projections
and longer-term policy challenges. The increase in energy prices and
Gigatonnes OECD BRIICS* Rest of the world
food prices is taking a heavy toll on the world economy. Growth has 80
slowed down in several OECD and non-OECD countries. Monetary x 1.5
policy is being tightened with the aim containing the inflationary 60

x 2.2
impulse of higher energy and food prices. The risks of debt distress
x3 x 2.5 Biomass
in low-income countries is increasing while the impacts of higher 40
x 1.6
x 2.8 Fossil fuels
costs of living are disproportionately affecting people on low x 0.9
x 3.9 Metals
x 1.5
incomes. 20 x 1.7
Non-metallic
x 2.5 x4 minerals
0
2017 2040 2060 2017 2040 2060 2017 2040 2060
*BRIICS: Brazil, Russia, India, Indonesia, China, South Africa
Source: OECD (2019) Global Material Resources Outlook to 2060.

https://doi.org/10.1787/9789264307452-en
© OECD 2023
3
Evolution of GHG emissions by region:
At the same time, the urgency to act to address environmental Baseline projection 2010 to 2060
degradation has not subdued. Climate change, biodiversity loss, 70,000
worsening resource bottlenecks, and life-shortening air pollution 60,000

continue to pose great systemic risks to the wellbeing of current
50,000
and future generations. Without stronger action to improve the
40,000
environmental performance of our economies, the impacts of
environmental degradation will undermine development prospects 30,000
and the progress in well-being achieved in the past 50 years for at 20,000
least three reasons:
10,000
• Human well-being is inherently liked to the environment. 0

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
For example, air pollution is projected to cause 6-9 million
premature deaths globally by 2060 and there is increasing China Eurasia
India Middle East and Africa
evidence that it reduces labour productivity. Land-use change
OECD America OECD Europe
and wildlife exploitation increase the risk of emergence of new
infectious diseases.
Global plastic pollution under different policy
scenarios to 2060
• Changes to ecosystems do not necessarily follow a smooth, Plastic use Plastic Waste Mismanaged Plastic
Plastic Waste Leakage
foreseeable trajectory. For example, overshooting the Paris
Agreement target of keeping increase in temperature to 1.5°C
may push the earth over several tipping points, leading to
irreversible and severe changes in the climate system. 1231
1018
(-17%) 1014
827 837
• It is becoming increasingly costly to substitute physical (-33% ) (-17%)
679
(-33%)
capital for natural capital. For instance, if water becomes more

460
polluted, it is more costly to ensure water access because more 353
153
transport and purification infrastructure is needed. 79
59
6 20 6
2019
(-62%) 22 44 (-55%)
(-96%) (-85%)
Yearly value in Mt
Baseline - 2060 Regional Action - 2060 Global Ambition - 2060
(percentage change compared to Baseline)
© OECD 2023 Source: OECD (2022) Global Plastics Outlook Policy Scenarios to 2060.
https://doi.org/10.1787/aa1edf33-en
Consistency of actions across all policy domains (e.g. trade,

labor, fiscal policies) is necessary to ensure that longer-term
environmental, social and economic goals can be met. Building
on its Green Growth Strategy and the OECD Secretary General’ Productivity
Strategic Orientations presented at the OECD Ministerial Council Growth
in 2022, the OECD leverages its multidisciplinary reach to provide
policy advice and identify best practise for an inclusive green
Wellbeing
transition. For instance, the OECD’s horizontal project Net Zero+:
Climate and economic resilience in a changing world draws on
expertise from across the OECD to deliver impactful policy advice Inclusive Green
to members on how policies that address near-term challenges can Growth Growth
also be aligned with building longer-term resilience.
Productivity growth, green growth and inclusive growth are three

key aspects of the OECD efforts to help countries sustain economic
growth and improve wellbeing in the context of sustainable
development.
The Green Growth Strategy

Following the 2008-2009 crisis, OECD countries have adopted the Green Growth Strategy, which aims at “fostering economic growth and
development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies”.
To do this, it must catalyse investment and innovation that will underpin sustained growth and give rise to new economic opportunities for all
in inclusive ways. Since then, the OECD Green Growth strategy has provided a green lens for more than 20 OECD Committees’ and bodies’
activities.
The world is currently experiencing a situation very similar to that of 2009. The Russian aggression against Ukraine and the COVID-19
pandemic have brought about an unprecedented global crisis. At the same time, there is an increasing global consensus that responses to
these crises must also accelerate action to address environmental degradation. Many countries, including developing ones, have introduced
measures to cushion impacts of these crises while also supporting the transition towards a green and resilient economy. Green growth policies
can help to achieve these intertwined objectives.
© OECD 2023
5
Inclusive Forum on Carbon Mitigation Approaches (IFCMA)
The Inclusive Forum on Carbon Mitigation Approaches (IFCMA) is an initiative designed to help improve the global impact of
emissions reduction efforts around the world through better data and information sharing, evidence-based mutual learning and
inclusive multilateral dialogue. It brings together all relevant policy perspectives from a diverse range of countries from around
the world, participating on an equal footing basis, to take stock of and consider the effectiveness of different carbon mitigation
approaches. As of 30 January 2023, 133 countries around the world, representing around 91% of global GDP and covering around
83% of global emissions, have adopted net-zero carbon emissions targets.
Consistent with the principles of the multilateral climate policy architecture as set out in the Paris Agreement, countries use or
plan to use a widely varied set of emissions reduction policies – both price-based and non-price-based – as tailored to different
national circumstances. To achieve the shared global objective of net zero emissions, the key challenge is to optimise the
combined global impact of all these individual emissions reduction efforts. This is what the IFCMA will help to facilitate through
data and information sharing, mutual learning and inclusive multilateral dialogue.
website
• www.oecd.org/climate-change/inclusive-forum-on-carbon-mitigation-approaches/
Contact for more information
OECD IFCMA team

Email: IFCMA@oecd.org
© OECD 2023
The OECD horizontal project Net Zero+: Climate and economic resilience in a changing world is a major step in
mainstreaming climate change across the work of the OECD.
Action on climate has never been more urgent. The threat of crossing climate system tipping points means overshooting 1.5oC
will likely result in catastrophic consequences – accelerated climate action, on both mitigation and adaptation, is essential.
At the same time, the social and economic vulnerability exposed in different ways by COVID-19 and the war in Ukraine have
underscored the importance of making sure that approaches to climate policy are designed to be resilient. Equally, these global
disruptions have also offered opportunities to enhance climate policy efforts, in particular for accelerating the energy transition.
This has provided important lessons for designing effective and long-lasting climate policies that take into account the profound
economic and social implications of the net-zero transition – e.g., on public finances, labour markets and income distribution
Launched in 2021, the Net Zero+ project brings together findings from across the OECD’s multidisciplinary expertise to support
governments in designing climate policies that are effective, long-lasting and resilient to changing circumstances.

website
• www.oecd.org/climate-change/net-zero-resilience/ Andrew Prag Klian Raiser
Environment Directorate Environment Directorate
Email: Andrew.Prag@oecd.org Email: Kilian.Raiser@oecd.org
© OECD 2023
7
Mainstreaming the Green Growth Strategy
The OECD continues to support strategies for greener growth through its core advice in country-specific and multilateral
surveillance. The main outcomes include a more systematic account of green growth issues in its Going for Growth flagship
reports, Economic Surveys, Environmental Performance Reviews, Investment Policy Reviews, Innovation Policy Reviews
and Multi-dimensional Country Reviews of OECD countries and emerging economies. Green growth and climate change
are also integrated into the OECD’s sector and issue-specific work in key areas such as taxation, innovation, investment,
trade, industry, energy (with IEA), transport (with ITF), food and agriculture, tourism, skills and jobs, biodiversity and
water management, rural and urban development.
The framework of the OECD Green Growth Strategy provides While there is no “one-size-fits-all” prescription for implementing
a ‘green lens’ for looking at growth, development, and human green growth, the OECD’s analytical work over the past years
wellbeing. It aims to identify mutually reinforcing aspects of resulted in the ability to provide concrete targeted advice to
economic and environmental policy as well as synergies with the member and partner countries in mainstreaming green growth and
inclusiveness agenda. It recognises the full value of natural capital climate change into national and multilateral policies.
as a production factor along with other commodities and services.
It focuses on cost-effective ways of reducing environmental
pressures, to achieve a transition towards new patterns of
growth that will avoid crossing critical local, regional and global
environmental thresholds. Mainstreaming green growth in social
policies needs to aim to enhance equity and inclusiveness.
© OECD 2023
Green growth and the
Sustainable Development Goals
(SDGs) Key Publications and website
• The inequalities-environment nexus: Towards a people-centred green
Green growth is a subset of sustainable
development. It entails an operational policy transition (2021)
agenda that can help achieve concrete, • Towards Green Growth? Tracking Progress:
measurable progress at the interface of the Four years of the Green Growth Strategy (2015)
economy and the environment. It fosters the • Towards Green Growth? Tracking Progress: Key Findings and
necessary conditions for innovation, investment
and competition that can give rise to new Recommendations (2015)
sources of economic growth that are consistent • What we have learned from attempts to induce green growth policies? (2013)
with resilient ecosystems. • Towards Green Growth (2011)
• Tools for Delivering Green Growth (2011)
Green growth strategies need to pay specific
attention to the social issues and equity • www.oecd.org/greengrowth
concerns that can arise as a direct result
of greening the economy. This means that
strategies should be implemented in parallel
with initiatives focusing on the broader
economic, social and environmental pillars of
sustainable development. At the same time,
it should be recognised that lack of action to
green economies creates equity concerns as
disadvantaged households are often more
exposed and vulnerable to pollution and climate
change.
The Agenda 2030 for Sustainable Development

and the SDGs are today the norm for all
countries, developed and developing alike. The
OECD supports the United Nations in ensuring
the success of the 2030 Agenda by bringing Contact for more information
knowledge and expertise to inform policies
Enrico Botta
through; data and evidence-based analysis,
Environment Directorate
best practices identified through developing
and developed countries’ own approaches, and Email: Enrico.Botta@oecd.org
guidance and lessons on innovative ways to
implement green growth strategies. © OECD 2023
9
SPOTLIGHT—Navigating the twin transitions:

Going green and digital
The multiple intersections between the digital and green What opportunities does digitalisation create for the green
transitions will generate both opportunities and challenges transition, and how to mitigate its potentially negative
for the societal efforts to shift economies to more sustainable environmental impacts, including for SMEs? What is the joint
development trajectories. For instance, smart meters and artificial impact of the twin transitions on competitiveness of sectors and
intelligence may support progress towards net-zero power systems, regions, labour conditions and migratory flows, and how to ensure
local sensing and earth observation techniques may improve that certain workers, social groups, e.g. youth, older people and
environmental monitoring and enforcement, and digitally-enabled the most disadvantaged communities are not left behind? What
business models could contribute to the adoption of more circular role do subnational governments need to play? Which policies
production and consumption practices. Yet at the same time, the can govern the two transitions systematically rather than in
growing carbon footprint of computing and increasing e-waste are piecemeal approaches also considering the implications of the war
key challenges, while the need for increased reparability of digital in Ukraine and the complexity of value chains? How can smart data
devices may require substantial change to their design. Furthermore, support better environmental policy-making and greener business
both transitions are likely to drive substantial changes in skills practices? Evidence on how digital technologies can improve
demand and economic structure with important implications for environmental democracy (e.g. access to information, participation
certain households, workers, communities and regions. in policy-making, and access to justice) for a green, digital and
inclusive society could also be addressed, as well as their role in
Under the overarching theme of Navigating the twin transitions: strengthening, monitoring & enforcement activities.
Going green and digital, the 2023 Green Growth Sustainable
Develompment Forum (Paris, November 28-29 November 2023)
will discuss the synergies and trade-offs between the digital and
green transitions, and policies to help accelerate the sustainability
transformation that takes advantage of digitalisation while leaving
no one behind.
© OECD 2023
The Green Growth and Sustainable Development Forum (GGSD Forum)...
...Is an OECD initiative to provide a dedicated space for multi-disciplinary dialogue on green
growth and sustainable development. The GGSD Forum brings together experts from different
policy fields and disciplines, facilitates the exchange of knowledge and identifies potentials for
cross-fertilisation. It is a valuable supplement for the work undertaken in individual government
departments and ministries by addressing the horizontal, multidisciplinary aspects of green
growth and sustainable development. In 2023 and 2024, the GGSD Forum will provide a venue
to discuss key findings and identify knowledge gaps in the context of the Horizontal Project on
"Building Climate and Economic Resilience in the Transformation to a Low-carbon Economy".
The GGSD Forum operates as annual conferences, focusing each year on a different cross-cutting
issue related to sustainable development and green growth. The GGSD Forum is open to stakeholders
and experts from OECD Committees, government ministries and agencies, academia, businesses
civil society and other international organisations.
The GGSD Forum is also a meeting point for policy makers and experts from OECD and partner
countries to exchange experiences and identify policy tools and best practices that respond to their
specific country circumstances.
Learn more on the past GGSD Forums at: www.oe.cd/ggsdForum
© OECD 2023
11
Green growth indicators

Moving towards green growth requires appropriate information The proposed indicator set is neither exhaustive nor final, and
and reliable indicators that support policy development and has been kept flexible so that countries can adapt it to different
analysis while tracking progress. The OECD framework for national contexts. It is integrated into OECD work, including
monitoring progress towards green growth includes indicators in country reviews and policy analysis.
four areas: (1) the environmental and resource productivity of
the economy; (2) the natural asset base; (3) the environmental The OECD continues advancing the measurement of green
dimension of quality of life; and (4) economic opportunities growth indicators (definitions, calculation methods, underlying
and policy responses. A small sub-set of six headlines indicators data). Currently, the focus is on measuring changes in land cover
has been identified to facilitate communication with policy makers, and people’s exposure to air pollution, greening the multifactor
the media and citizens: productivity measure, accounting for carbon emissions and
raw materials embodied in trade, creating a natural resource
index, as well as further development of indicators of economic
Carbon productivity opportunities and policy responses (such as environmentally
related taxes and innovation). This is supported by OECD work
Non-energy material productivity on the implementation of the System of Environmental Economic
Accounting (SEEA), carried out jointly by the OECD Environment
Environmentally-adjusted, whole-economy
Directorate and the OECD Statistics and Data Directorate. It
(multi-factor) productivity
includes work on air and greenhouse gas emission accounts, natural
Natural resource index assets and material flow accounts, as well as work to improve data
and accounts on environmental expenditure and tax revenue.
Land cover and use
The OECD work also draws on Earth observation and other
Population exposure to air pollution (PM2.5) geospatial data to fill gaps in environmental data and improve its
information base.
© OECD 2023
Highest overall improvements towards green growth,

The OECD designed the Green Growth Indicators to help
2015-2020
countries assess and compare their progress. The measurement
framework combines the main features of green growth with the CZECH REPUBLIC ISLAND
basic principles of accounting and the pressure-state-response CO₂ productivity CO₂ productivity
(demand-based) (demand-based)
(PSR) model. The indicators provide an important building block for Low air pollution CO₂ productivity Low air pollution CO₂ productivity
exposure (production-based) exposure (production-based)
monitoring progress towards several SDGs, and for the International
Material productivity Material productivity
Programme for Action on Climate (IPAC) that harmonises and Low land consumption
(production-based)
Low land consumption
(production-based)
fills the gaps of existing data sources, and on key aspects of climate Environmentally Environmentally Environmentally Environmentally
related related related related
change policymaking, such as climate-related hazards. innovation taxation innovation taxation
Low income inequality GDP per capita Low income inequality GDP per capita
Green growth indicators are regularly used in OECD country

reviews that help countries improve their policies and practices and
JAPAN LATVIA
share their experience. OECD experts contribute to development
CO₂ productivity CO₂ productivity
and refinement of methodologies for global SDG indicators and to (demand-based) (demand-based)
Low air pollution CO₂ productivity Low air pollution CO₂ productivity
related global data collection. The OECD is an observer to the UN exposure (production-based) exposure (production-based)
Inter-Agency and Expert Group on SDG indicators. Low land consumption

Material productivity
Low land consumption
Material productivity
(production-based) (production-based)
Environmentally Environmentally Environmentally Environmentally

related related related related
innovation taxation innovation taxation
Low income inequality GDP per capita Low income inequality GDP per capita
Note: Improvements shown here are determined by comparing results in 2020 (or last
available year) to 2015 («distance to the leader»). The black dashed line indicates no
change; values below that level indicate deterioration.
Source: OECD Green Growth Indicators (database), World Bank (2022).
https://stats.oecd.org/Index.aspx?DataSetCode=GREEN_GROWTH
© OECD 2023
13
Green growth indicators framework

G R EEN G R O W TH M E A S U R E M E N T FR A M E W OR K
SOCIO-ECONOMIC CONTEXT AND

THE CHARACTERISTICS OF GROWTH ECONOMIC
OPPORTUNITIES AND
POLICY RESPONSES
inputs PRODUCTION outputs CONSUMPTION
taxes
subsidies
labour income regulations
+ Recycling
re-use,
remanufacturing, INVESTMENTS
substitution
investment
capital ENVIRONMENTAL goods & services ENVIRONMENTAL innovation
AND RESOURCE QUALITY OF LIFE trade
resources PRODUCTIVITY residuals
education
training
jobs
energy and raw materials pollution and waste amenities, health

water, land, biomass, air
sink functions
NATURAL
resource ASSET BASE service
functions functions
Icons from TheNounProject.com
© OECD 2023
Key Publications and websites

• OECD Environment Statistics (2022)
DID … that the Green • Environment at a Glance (2022)
YOU Growth Indicators • Green Economy Transition in Eastern Europe, the Caucasus and
Database brings
KNOW? Central Asia Progress and Ways Forward (2022)
together the
• Land Cover Change and Conversions (2018)
data needed for calculating the
• Towards Global SEEA Air Emission Accounts (2018)
OECD’s green growth indicators
and contains selected indicators • Green Growth Indicators (2017)
to support economic and • www.oecd.org/site/envind
environmental policy analysis for • http://oe.cd/ggi-data
monitoring progress towards green • www.oecd.org/environment/environment-at-a-glance/
growth. • www.oecd.org/climate-action/ipac/dashboard
Countries like the Czech Republic,

Denmark, Germany, Korea, the Contact for more information
Netherlands, Slovenia and the
Slovak Republic have already Nathalie Girouard Rodrigo Pizarro
applied the OECD green growth Environment Directorate Environment Directorate
measurement framework. Mexico E-mail: Nathalie.Girouard@oecd.org E-mail : rodrigo.pizarro@oecd.org
produced a draft report and work
is underway in LAC countries Myriam Linster Sarah Barahona
(Colombia, Costa Rica, Ecuador, Environment Directorate Statistics and Data Directorate
Guatemala, Paraguay and Peru) and E-mail: Myriam.Linster@oecd.org E-mail: Sarah.Barahona@oecd.org
in Eastern Europe, the Caucasus
and Central Asia (Azerbaijan, Ivan Haščič
Moldova and Kazakhstan). Environment Directorate
E-mail: Ivan.Hascic@oecd.org
© OECD 2023
15
Green growth in country policy surveillance

Having the institutional and governance capacity to implement Environmental Performance Reviews include a chapter on green
wide-ranging policy reform is an essential condition for greening growth, which looks at the country’s policy mix for mainstreaming
growth and achieving sustainable development. Governments environment considerations into economic and fiscal policies, as
need to be able to integrate green growth objectives into broader well as at the employment and distributional implications of the
economic policymaking and development planning. transition towards green growth. All OECD member countries have
been reviewed, most of them for the third time. Partner countries,
The OECD is mainstreaming green growth in national policy such as South Africa, Colombia, Brazil and Peru have been reviewed
surveillance exercise such as Economic Surveys, Environmental recently. A Green Growth Policy Review of Indonesia has been
Performance Reviews, Innovation Reviews, Investment Policy released in 2019.
Reviews and Multi-dimensional Country Reviews. This approach
offers opportunities for an in-depth appraisal of whether and how
policies are working to drive green growth. Experience gained
through country reviews and general policy assessment also based
on cross-country analysis leads to identify good practice, and to
the development of better analytical tools to address country-
specific policy priorities.
© OECD 2023
Economic Surveys have been increasingly focusing on As countries issued pledges for “building their economics back
climate change and other environmental issues with the aim of better” during the COVID-19 pandemic, the OECD Green Recovery
identifying and assessing policy complementarities and trade- Database collected and tracked information on COVID-19 recovery
off between environmental policies and other macroeconomic spending across the OECD and large economics with clear positive,
and structural polices while taking into account the specific mixed or negative environmental impact. The most recent data
circumstances each country faces. Surveys assessment of climate show that measures with a positive environmental impact amount
policy builds on the Framework to Decarbonise the Economy. to 33% of total recovery spending.
The Framework highlights the need for developing decarbonisation
strategies based on a wide policy mix consisting of three main Focusing primarily on non-OECD emerging economies, the Multi-
components: 1) emission pricing policy instruments; 2) standards dimensional Country Reviews (MDCRs) address socioeconomic
and regulations; 3) complementary policies to facilitate the issues of relevance to green growth. For example, the MDCRs
reallocation of capital, labour and innovation towards low-carbon of Western Balkans (2022) and Vietnam (2020) include chapters,
activities and to offset the adverse distributional effects of respectively, on green recovery and environmental management.
reducing emissions. However, there is no one-size-fits-all policy
mix, as feasible policy choices depend on countries’ industrial The Climate Actions and Policies Measurement Framework
structure, social preferences and political constraints. Some recent (CAPMF) provides a comprehensive internationally harmonised
Economic Surveys that have addressed climate change in depth climate-related policy database for 52 countries and the period
include the Survey of Denmark, Estonia, France, Greece, Iceland, 2000-2020. In addition, the Inclusive Forum on Carbon
Luxembourg, and the United Kingdom. Green growth features in Mitigation Approaches (IFCMA) was recently launched to support
every Survey’s key recommendations. Paris Agreement goals by improving mutual understanding of the
expected impact of a full range of policy approaches to reduce
Since 2019, the Going for Growth report includes environmental emissions. The IFCMA will collate the full range of mitigation policies
sustainability as an additional dimension in the framework to (regulatory, incentive-driven, price-based etc.), first by preparing
identify economy-specific policy priorities. a typology, and then making an assessment of effectiveness in
reducing emissions. It will involve the equal footing participation of
OECD member and non-member countries.
© OECD 2023
17
The OECD The OECD Investment The OECD Economic Surveys The Multi-dimensional
Environmental Policy Reviews seek to help encourage Country Reviews aim to
Performance countries improve domestic governments to design policies and strategies
Reviews examine conditions for investment focus on green that promote development
how countries’ in support of green growth growth issues, in a holistic sense, identifying
environmental objectives. Review of Thailand and periodically policies to remove constraints
policy frameworks (2021), provide an to sustainable development.
can support green growth, Myanmar assessment The Western Balkans (2022) and
including through pricing (2020), and of how Vietnam (2020) Reveiws focus
mechanisms and transition Vietnam environmental and growth respectively,
measures. Recent reviews (2018) policy recommendations on the green
include United Kingdom include interact, with more and more recovery and
(2022), Norway (2022), a green surveys covering green growth environmental
Finland (2021), Lithuania growth and climate issues in depth, management.
(2021), and Ireland (2021). focus. including Luxembourg (2022),
Fortcoming Environmental Environmental challenges the United Kingdom (2022)
Reviews (2023) include: will also be addressed in the Estonia (2022), Denmark (2021),
Israel, Portugal, Costa Rica, upcoming Investment Reviews France (2021), and Iceland
Germany and the United (2023) on Bangladesh and (2021). The upcoming Economic
States. the Economic Commumity of Surveys (2023) on Germany,
West African States (ECOWAS). Sweden and the European Union
will also include a focus on
environmental issues.
© OECD 2023

Websites
• www.oecd.org/eco/surveys
Fatima Talidi
• www.oecd.org/environment/country-reviews
Economics Department
• www.oecd.org/sti/inno/oecdreviewsofinnovationpolicy.htm
E-mail: Fatima.Talidi@oecd.org
• www.oecd.org/investment/countryreviews.htm
• www.oecd.org/development/mdcr/ Iris Mantovani
• www.oecd.org/climate-action/ipac/ Directorate for Financial and Enterprise Affairs
• www.oecd.org/coronavirus/en/themes/green-recovery#green-recovery-database E-mail: Iris.Mantovani@oecd.org
Nathalie Girouard
E-mail: Nathalie.Girouard@oecd.org
Jan Rielaender
Development Centre
E-mail: Jan.Rielaender@oecd.org
© OECD 2023
19
Fiscal policy and green growth

Looking at the whole range of fiscal policy instruments, including The OECD Inventory of Support Measures for Fossil Fuels
taxes, tradable permits, and subsidies, the OECD help countries to provides estimates of government measures that encourage fossil-
better assess the environmental implications of their fiscal policies. fuel production or consumption relative to renewable alternatives.
The 2021 OECD report Biodiversity, Natural Capital and the The latest edition of the Inventory includes around 1 500 support
Economy estimates environmentally harmful support – which measures in 51 OECD, G20 and EU Eastern Partnership economies.
include fossil fuel support - at more than USD 800 billion a year.
A report for 2023 reviews types and estimates of environmentally Recent analysis shows that a EUR 10 increase in carbon pricing
harmful subsidies across different sectors in order to identify would decrease CO2 emissions from fossil fuels by 3.7% on average
priorities for reform. in the long term. Broadening carbon pricing to currently unpriced
emissions contributes to two thirds of the modelled effects on
The OECD develops in-depth and detailed analyses of the taxation emissions and revenues. Also, dynamic simulations stress the
of energy use and the pricing of greenhouse gas emissions, as well importance of complementary policies, such as green technology
as support to the extraction, production and use of fossil fuels. The support measures and regulations, since even large effective
report on Pricing Greenhouse Gas Emissions: Turning climate carbon rates (about EUR 1000 per tonne by late 2030s) will not
targets into climate action, which covers 71 countries that suffice to meet net-zero emission targets.
account for approximately 80% of global GHG emissions, finds that
more than 40% of GHG emissions were covered by carbon prices
in 2021, and that the average Net Effective Carbon Price – the
sum of explicit carbon prices and fuel excise taxes, minus fossil fuel
subsidies – increased to EUR 17.
© OECD 2023
Countries have increased their use of carbon pricing through taxes or emissions trading systems,
with coverage increasing across sectors
Road transport (CO2)

Electricity (CO2)
Off-road transport (CO2)
Agriculture (CO2)
Buildings (CO2)
Industry (CO2)
All GHG (CO2e)
Note: All GHG includes both CO2 and non-CO2 emissions. Percentages are rounded to the first decimal place.
Source: OECD (2022) Pricing Greenhouse Gas Emissions: Turning climate targets into climate action, https://doi.org/10.1787/e9778969-en
The Agricultural Policy Monitoring and Evaluation report shows The OECD is the only international organisation that measures
that half of support to agriculture in monitored countries is market and reports policy effort in the fisheries sector on an annual basis
distorting, inequitable and harmful to both the environment and through its Fisheries Support Estimate (FSE) database. Work
global food security. Only one sixth of budgetary support to will be undertaken to better understand the impacts of support
agriculture globally is spent in ways that are effective in promoting to fisheries on overfishing and overcapacity, the two overarching
sustainable productivity growth and agricultural resilience. concerns of global action on fisheries subsidies.
© OECD 2023
21
Large difference among average tax rates on different fuels
Source: OECD (2022) Pricing Greenhouse Gas Emissions: Turning climate targets into climate action, https://doi.org/10.1787/e9778969-en
The OECD Paris Collaborative on Green Budgeting aims at The report Green budgeting: A way forward identifies seven
helping countries to embed climate and other environmental goals key areas to support the development of green budgeting
within national budgeting frameworks. Currently, more than 50% of practices in making progress toward climate and environmental
OECD countries implement green budgeting and environmentally goals. Furthermore, a database with firm-level information on
related tax revenues were at 1.35% of GDP on average among the environmentally harmful support to selected industrial sectors (e.g.
38 OECD economies in 2020. aluminium, steel, cement, glass and petrochemicals) is also under
development.
© OECD 2023

• Pricing Greenhouse Gas Emissions: Turning climate targets into
climate action (2022) Kurt Van Dender
• Estimating the CO2 Emission and Revenue Effects of Carbon Centre for Tax Policy and Administration
Pricing: New evidence from a Large Cross-country Dataset, OECD E-mail: Kurt.Vandender@oecd.org
Economics Department Working Paper (2022)
Nathalie Girouard
• Agricultural Policy Monitoring and Evaluation (2022)
• Green budgeting: A way forward, OECD Journal
E-mail: Nathalie.Girouard@oecd.org
on Budgeting (2022)
• Tax Revenue Implications of Decarbonising Road Transport: Andrew Blazey
Scenarios for Slovenia, OECD/ITF (2019) Public Governance Directorate
• Taxing vehicles, fuels, and road use: Opportunities for improving E-mail: Andrew. Blazey@oecd.org
transport tax practice, OECD Taxation Working Papers (2019)
• Unintended technology-bias in corporate income taxation: Claire Delpeuch
The case of electricity generation in the low-carbon transition, Trade and Agriculturate Directorate
OECD Taxation Working Papers (2018) E-mail:Claire.Delpeuch@oecd.org
• https://www.oecd.org/fossil-fuels/
© OECD 2023
23
Environmental policies and economic outcomes

Ongoing empirical work sheds light on the economic effects of environmental policies
The effects of environmental policies on economic performance The EPS indicator had been used in empirical analysis to gauge
are a subject of heated debate. On the one hand, environmental the effects on multifactor productivity growth, trade and
policies have been argued to burden economic activity, as they competitiveness, investment and innovation at the macroeconomic,
raise costs without increasing output and restrict the set of industry and firm levels. The work shows that environmental
production technologies and outputs. On the other hand, the policies need not be bad for productivity and that in practice some
Porter Hypothesis claims that well-designed environmental policies aspects of their design can be made more friendly to entry and
can encourage innovation and gains in efficiency and profitability, competition without compromising the stringency of the policy
which can outweigh the costs of compliance. signal.
Joint work between the OECD Environment Directorate and the The stringency of environmental policies has been
Economics Department on environmental policies and productivity increasing across countries
growth has laid the ground for empirical analyses of the economic EPS in 2020 EPS in 2000
effects of environmental policies. It provided quantitative proxies

6
measuring the stringency and competition - friendliness of 5
environmental policies. In particular, the recently updated indicator

of Environmental Policy Stringency (EPS) provides a comparable, 4
cross-country and over-time measure of the aggregate stringency

3
of selected environmental policy instruments.
2
Source: Kruse, T., et al. (2022), "Measuring environmental policy stringency in OECD countries:
© OECD 2023 An update of the OECD composite EPS indicator", https://doi.org/10.1787/90ab82e8-en
Further empirical analysis shows that more stringent environmental

The DEEP indicator and measures of environmental
policy stringency
policies are effective at inducing innovation in low-carbon
technologies in the directly regulated sectors, though not along
5
the whole supply chain. In addition, increases in energy prices and
Environmental Policy Stringency (2018 value)

in EPS increase the probability of firm exit from energy intensive 4
sectors but have a positive effect on the employment level of
surviving firms. Accelerated firm exit allows surviving firms to 3
expand, boosting firm-level employment.
2
Also, evidence shows that higher energy prices are not key drivers
of overall trade in manufactured goods, but were associated with 1
tilting the comparative advantage away from pollution intensive

industries. At the same time, a corresponding advantage in cleaner 0
0.00 1.00 2.00 3.00 4.00
industries could be identified. Similarly, higher energy prices could DEEP (2018 value)
indeed be associated with higher outwards FDI stock at the firm-
Source: Berestycki, C. and A. Dechezleprêtre (2020), "Assessing the efficiency of environmental policy
level. However, the effects were small with respect to other drivers design and evaluation: Results from a 2018 cross-country survey" https://doi.org/10.1787/482f8fbe-en
of FDI.
Greener growth requires stringent environmental policies that Using a new indicator of Climate Policy Uncertainty, recent work
are flexible and that minimise barriers to entry and competition. shows that uncertainty in climate policy making can reduce firms’
International evidence, as captured by the indicator of the Design investments, in particular in carbon-intensive industries. Clear
and Evaluation of Environmental Policies (DEEP), shows policy trajectories are important to encourage investments into
that the extent to which environmental policies create barriers much needed low-carbon technologies.
to competition (i.e. administrative burdens and discrimination
between entrants and incumbents) and the consideration given to
their economic effects in their design vary notably across countries.
Hence, stringent environmental policies can – and should - be
designed in order to minimize barriers to entry and competition.
© OECD 2023
25

A priority for future work is to better understand if segments of
society that share joint characteristics beyond income are more
exposed to environmental or local climate hazards or to the Mauro Pisu
costs associated with environmental policy measures. The paper Economics Department
Managing the distributional effects of environmental and E-mail: Mauro.Pisu@oecd.org
climate policies: The narrow path for a triple dividend reviews
Tobias Kruse
the literature on the distributional effects of environmental and
Economics Department
climate policies, and decomposes the distributional effects into
E-mail: Tobias.Kruse@oecd.org
the main dimensions to understand which policy packages are more
likely to achieve a triple dividend of environmental effectiveness, Filippo Maria D’Arcangelo
economic efficiency and equity. Economics Department
E-mail: FilippoMaria.Darcangelo@oecd.org
Key Publications and websites Shardul Agrawala

• A framework to decarbonise the economy, OECD Economic Environment Directorate
Policy Papers (2022) E-mail: Shardul.Agrawala@oecd.org
• Measuring and assessing the effects of climate policy uncertainty,
Nicolina Lamhauge
OECD Economics Department Working Papers (2022)
• Assessing the Economic Impacts of Environmental Policies:
E-mail: Nicolina.Lamhauge@oecd.org
Evidence from a Decade of OECD Research (2021)
• Managing the distributional effects of environmental and climate Olof Bystrom
policies: The narrow path for a triple dividend, OECD Environment Environment Directorate
Working Papers (2021) E-mail: Olof.Bystrom@oecd.org
• http://oe.cd/eps
• www.oecd.org/environment/tools-evaluation
• www.oecd.org/environment/greeneco/framework-to-decarbonise-
the-economy/
© OECD 2023
© OECD 2023
27
A green transition that leaves no one behind

A fair transition for households and OECD work has looked at the distributional effects of energy taxes
communities as well as the potential distributional consequences related to the

phasing out of fossil fuel subsidies. Carbon pricing reforms that cut
The transition towards a green economy can help to address existing CO2 emissions may mean higher energy prices, which is a particular
inequalities in our societies. Vulnerable groups and households are threat to poor households as they typically spend a large share of
more exposed to the impact of environmental degradation, such their income on energy bills. OECD analysis reveals that transferring
as climate change and air pollution, and more vulnerable to its a third of the additional revenues from an energy pricing reform
consequences. At the same time, greening measures may negatively to poor households, by means of an income-tested cash transfer,
affect economic activities in certain regions or increase the prices would be sufficient to increase their ability to pay for their energy
of basic services (e.g. water, energy) with negative implications needs.
especially for lower income households. With the right policy
packages, the green transition can benefit all and ensure that no Spatial planning instruments have long been used to organise and
one is left behind. alter the distribution of human settlements and economic activity,
and balance tensions between economic, social and environmental
objectives. The OECD Spatial Planning Instruments and the
Environment (SPINE) project investigates the role played by
spatial planning and land use policies in managing the trade-offs
between environmental, economic and social objectives. The
case studies dedicated to Auckland and Santiago use the MOLES
model to provide a holistic welfare evaluation of decarbonisation
and air pollution mitigation policies, to assess their environmental
effectiveness, economic efficiency and their impact on fiscal
© OECD 2023
balance and housing affordability. Ongoing work for the Greening OECD work also focused on specific demographics that are most
Mobility and Transport project takes stock of the distributional vulnerable to the impact of environmental degradation. Youthwise,
impacts of policies discouraging car use. Among others, the study which is the OECD’s Youth Advisory Board, was established to
examines whether road pricing, distance-based charges, the fuel bring the youth perspectives in OECD work. Youthwise members
tax and parking fees impose a higher burden on low-income are contributing to shaping OECD action on the green transition
groups, and the degree to which this may be context-specific. The by providing inputs to projects and joining the debate with high-
study identifies complementary measures that can increase the level government officials. Youthwise members participated to the
inclusiveness and public acceptability of transport policies that are OECD events at COP26 and COP27, the plenary session of the 2022
key to the transition to net zero. OECD Environmental Ministerial Meeting alongside the Secretary-
General and OECD Ministers, and contributed to the OECD’s
Beyond energy, also water policies can have distributional Horizontal Project on Climate and Economic Resilience.
implications if they raise water tariffs. Investment needs and more
stringent environmental and health standards can increase the Gender equality and environmental goals intersect and can be
costs of water supply and sanitation services globally. A review mutually reinforcing but insufficient attention has been paid into
of financing needs and capacities in 27 European Member States breaking the silos. The OECD report on Empowering Women
projects that, while these services remain affordable for the vast in the Transition towards Green Growth in Greece provides
majority of the population, fully reflecting additional costs into a framework for assessing environmental and climate policies
tariffs would bring average bills at 3-5% or more of households’ through a gender lens, and gender equality policies through an
budgets for the lowest decile of the population in several OECD environmental lens. The OECD report on Supporting women’s
countries. This would raise affordability concerns for these groups. empowerment through green policies and finance finds that,
even if the interlinkages that shape the gender-environment nexus
The OECD Environmental Performance Reviews of individual are starting to be acknowledged, further efforts are needed to
countries also regularly assess public participation in decision foster synergies between gender and environmental goals in policy
making, as well as citizens’ access to information, justice and design, sustainable finance approaches as well as in infrastructure
environmental education. Ease of access to information, education planning and implementation.
and justice is instrumental to ensure that (environmental) polices
are fair.
© OECD 2023
29
Climate change can have complex and far-reaching impacts on The report The inequalities-environment nexus Towards a
migration across regions and countries. The OECD is planning a people-centred green transition analyses jointly the consequences
foresight exercise on migration and environmental change, with of the environmental degradation and of environmental policies
particular focus on examining the policy options of anticipated on several well-being dimensions. The report concludes that
scenarios and the role of diaspora communities to support policy packages for an inclusive green transition should aim at: (i)
resilience. In addition, the Equitable Framework and Finance for mitigating the possible regressive impact of pricing environmental
Extractive-based Countries in Transition (EFFECT) provides a externalities, (ii) investing in human capital and upgrading skills to
toolbox for policy makers to chart just, realistic, and sustainable facilitate labour reallocation, (iii) addressing systemic inequalities
low-carbon pathways, consistent with development priorities. with sectoral and place-based policies, (iv) ensuring efficient and
responsive governance.
Climate change will also have significant implications for countries’
health services, in the form of new and different demands for health
care arising from changing patterns of disease or acute events
associated with extreme weather. Lower income households are
often more vulnerable to such impacts because of lower baseline
health condition, ability to invest in adaptation technology,
and access to good quality healthcare. The Health Committee is
investigating the complex relationships between health and climate
change, including through the development and strengthening of
indicators to measure both climate change’s impact on health, and
the contribution of the health system to climate change.
© OECD 2023

• Equitable Framework and Finance for Extractive-based Countries in Transition (2022)
• Empowering Women in the Transition towards Green Growth in Greece (2022)
• Supporting women’s empowerment through green policies and finance, OECD Environment Policy Papers (2022)
• The inequalities-environment nexus: Towards a people-centred green transition, OECD Green Growth Papers (2021)
• Managing the distributional effects of environmental and climate policies: The narrow path for a triple dividend, OECD Environment Working
Papers (2021)
• “Air pollution and environmental degradation”, in Health at a Glance 2021: OECD Indicators (2021)
• Decarbonising Urban Mobility with Land Use and Transport Policies - The Case of Auckland, (2020)
• The Environmental and Welfare Implications of Parking Policies, OECD Environment Working Paper (2019)
• Multi-objective local environmental simulator (MOLES 1.0): Model specification, algorithm design and policy applications, OECD Environment
Working Papers (2017)
• www.oecd.org/health/healthy-people-healthy-planet.htm
• www.oecd.org/environment/tools-evaluation/spine-spatial-planning-instruments-and-the-environment.htm
• www.oecd.org/gender/
Shardul Agrawala Nicolina Lamhauge

Environment Directorate Lahra Liberti
E-mail: Nicolina.Lamhauge@oecd.org Development Centre
E-mail: Shardul.Agrawala@oecd.org
Email: Lahra.Liberti@oecd.org
Enrico Botta Dimitra Xynou
Environment Directorate Francesca Colombo
E-mail : Dimitra.Xynou@oecd.org Employment, Labour and Social Affairs Directorate
E-mail: Enrico.Botta@oecd.org
Email: Francesca.Colombo@oecd.org
Ioannis Tikoudis
E-mail: Ioannis.Tikoudis@oecd.org
© OECD 2023
31
In developing countries, where the majority of jobs are in the

Jobs and skills for a just transition agriculture sector, it is crucial that the greening of the agriculture
sectors is accompanied by the promotion of local value chain
Green policies can trigger job creation in a number of ‘green’ development. Recent study by the OECD Development Centre
economic sectors, while job destruction could occur in ‘brown’ shows that a transition towards a greener food production system
sectors. In addition, existing jobs are likely to change and require could lead to decent employment creation in both low and high
new skills as well as awareness of sustainability issues. An effective skilled-jobs, particularly for youth, in Africa and Southeast Asia.
transition to a low-carbon, resource- efficient and green economy
will only be possible by ensuring that workers are able to adapt to Some of the economic activities that are most difficult to make
new task and ways of working, transfer from areas of decreasing climate neutral are regionally concentrated. Achieving the transition
employment to other industries, and that human capital is therefore requires a regional perspective. This is shown in the
maximised to develop new industries. forthcoming report Regional industrial transitions to climate
neutrality. Since regions differ in their socio-economic conditions,
Active labour market and skills policies are crucial to help manage understanding the regional development implications is also
structural adjustments and minimise skills bottlenecks, including necessary to prepare a just transition. This report describes how
those that may be generated by the green transition. Vocational these activities are distributed across European regions, related
Education and Training (or VET) can help young people, as well as zero-emission-consistent infrastructure needs, and socio-economic
adults, to develop the technical and transversal skills need to thrive conditions of the regions most exposed to these transitions.
in greener economies and societies – especially when it provides
opportunities for work-based learning (e.g. apprenticeships). Education policies play a role to promote a sustainable growth
The inter-agency project Work-based Learning and the Green model by empowering individuals with the knowledge to identify
Transition describes how learning at the workplace can offer and resolve environmental challenges, and shape attitudes and
learners direct access to the innovative practices and technologies behaviours. PISA data show varying levels of environmental
brought about by the green transition, while at the same time knowledge and skills, attitudes and actions among 15-year-old
fostering collaboration and cross-fertilisation between employers students across countries/economies. Students need stronger
and VET institutions that could lead to eco-innovations. scientific knowledge and skills in environmental issues than they
currently have, especially in countries and economies where student
© OECD 2023
performance in science tends to be lower. Better performers in Ongoing work will identify changes in skill demand arising from
science have, on average, more pro-environmental attitudes than the climate transition with focus on the European Union 2030
lower-performing students, and students with pro-environmental targets as stated in the Fit for 55 policy package. It will combine
attitudes are more likely to take part in actions that benefit the Big Data analysis with projections based on the ENV-Linkages
environment. If schools help students find an environmental sense- model. The OECD is also supporting countries in carrying out
of-purpose, this can mobilise their knowledge and propel them their own assessments and facilitating peer learning. The project
into action. Environmental education initiatives that target school Skills for the Green Transition is gathering information on how
communities as a whole and not just individuals are promising. governments define green jobs and green skills and how they
evaluate the skills requirements of the green transition and best
prepare the adult learning systems to cope with the changes
brought about by greening policies. Research on how this analysis
of changing skill needs feeds into employment, education, training
and migration policies is also being investigated.
© OECD 2023
33

Key Publications
• Towards a greener and more inclusive society in Southeast Asia,
OECD Development Centre Studies (forthcoming) Elisa Lanzi
• Are Students Ready to Take on Environmental Challenges?, PISA Environment Directorate
(2022) E-mail: Elisa.Lanzi@oecd.org
• Teaching for climate action, Teaching in Focus (2022)
• Apprenticeships for greener economies and societies, Cedefop- Francesca Borgonovi
OECD (2022) Centre for Skills
E-mail: Francesca.Borgonovi@oecd.org
• Embedding Values and Attitudes in Curriculum: Shaping a Better
Future (2021)
Marieke Vandeweyer
• Jobs for Rural Youth: The Role of Local Food Economies,
Centre for Skills
Development Centre Studies (2021) E-mail: Marieke.Vandeweyer@oecd.org
• The jobs potential of a transition towards a resource efficient and
circular economy, OECD Environment Working Papers (2020) Kateryna Obvintseva
• A review of “Transition Management” strategies: Lessons for Education Directorate
advancing the green low-carbon transition”, OECD Green Growth E-mail: Kateryna.Obvintseva@oecd.org
Papers (2019)
• SMEs: Key drivers of green and inclusive growth, OECD Green
Growth Papers (2019)
• The distributional aspects of environmental quality and
environmental policies: Opportunities for individuals and
households, OECD Green Growth Papers (2019)
© OECD 2023
© OECD 2023
35
Behavioural insights The OECD is also completing the third round of Household Surveys
on Environmental Policies and Individual Behaviour Change
(EPIC). The EPIC Survey benchmarks environmental attitudes,
for green growth behaviours and support for policies related to energy use,
transport, food consumption and circular economy practices across
countries. Preliminary findings indicate that convenience and
Environmental policies need to help individuals consider the affordability remain key household priorities in all domains. Future
environmental consequences of their activities. Insights from work will assess the extent to which socio-economic, geographic
behavioural sciences and economics can help policy makers better and policy-related factors drive environmental behaviours and
understand the mechanisms driving individual decision-making analyse hypothetical policy scenarios using four discrete choice
and design policies that facilitate behavioural change. experiments included in the survey.
The working paper Fighting climate change: International Insights from behavioural sciences and economics have been used
attitudes toward climate policies, which is based on survey of to strengthen policy impact, in interaction with regulatory and
more than 40 000 respondents in twenty countries that account fiscal instruments, in country-specific OECD projects. The OECD
for 72% of global CO2 emissions, shows that support for climate worked with Israel to understand driving behaviours, anticipating
policies hinges on three key factors: the perceived effectiveness responses to congestion charges design and foster more sustainable
of the policies in reducing emissions, their perceived impacts on transport. Behaviourally informed instruments were considered
lower-income households, and expected personal gains and losses. in conjunction with investment and social policies to strengthen
The research also shows that several socioeconomic and lifestyle housing affordability in Latvia. The OECD BI team supported Italy
factors, including education and political leanings, are correlated in identifying opportunities to leverage behavioural economics to
with both policy views and beliefs about climate policies. Support support a green transition within the tourism sector. Further OECD
for carbon pricing strongly depends on the revenue use. It can research in this area includes an ongoing project on the role of
receive majority support if the revenues are used to invest in green behavioural insights in driving the circular economy transition in
technologies and recycled to vulnerable households. Italy.
© OECD 2023
As part of the Public Governance directorate’s “Governing Green” Key Publications and websites
initiative, the OECD Expert Group on Behavioural Insights • Overview Report on the EPIC Household Survey (forthcoming 2023)
is currently leading a working group of experts working in • Fighting climate change: International attitudes toward climate policies,
governments across 47 countries that focuses on three key areas; OECD Economics Department Working Papers (2022)
1) public awareness and support of green reforms, (2) improving • Policy Actions for Affordable Housing in Latvia (2020)
decision-making of policymakers to support green transition, and • Assessing Incentives to Reduce Traffic Congestion in Israel (2019)
(3) tackling misinformation related to climate change. • Leveraging the Smart Grid: The Effect of Real-Time Information on Consumer
Decisions (2018)
• Tackling Environmental Problems with the Help of Behavioural Insights (2017)
• The Rebound Effect in Road Transport: A Meta-Analysis of Empirical Studies
(2016)
• www.oecd.org/environment/consumption-innovation/households.htm
• www.oecd.org/environment/tools-evaluation/behavioural-experimental-
economics-for-env-policy.htm
Filippo Cavassini
Economics Directorate
E-mail: Filippo.Cavassini@oecd.org
Chiara Varazzani
Public Governance Directorate
E-mail: Chiara.Varazzan@oecd.org
Nicolina Lamhauge
E-mail: Nicolina.Lamhauge@oecd.org
© OECD 2023
37
Greening SMEs In November 2021, the OECD established a Platform on Financing

SMEs for Sustainability, bringing together key stakeholders,
including public and private financial institutions, policy makers
and SME representatives, with the aim to foster knowledge sharing
on sustainable finance for SMEs and identify practical financial
Small and medium enterprises (SMEs) account for 60% of total solutions to accompany SMEs on their journey to net zero.
employment and have significant footprint on aggregate in OECD
economics. Furthermore, entrepreneurship is a key driver of growth Ongoing work examine the
and invention of new business models and technologies. Therefore, wide range of policies and
their greening is critical for green growth. schemes introduced
by governments
However, SMEs and entrepreneurs face a number of barriers in to stimulate and
their greening efforts. In addition to complexity around business
cases, a lack of awareness, information and knowledge on changing
support green
entrepreneurship
FINANCING SMES
environmental requirements and needs represent additional in recent years with FOR SUSTAINABILITY
challenges. case studies on the
approaches used in
Current work focuses on better understanding the drivers and Canada, Germany and
barriers for green entrepreneurship and the greening of SMEs, Israel.
taking account of their different types of sectors, places, and
business models. Also, a dashboard of SME greening
and green entrepreneurship indicators is being developed with
the aim of addressing the lack of sound and comparable evidence
on the magnitude and type of SME environmental impacts and
greening efforts across countries.
© OECD 2023
Key Publications and website

• Financing SMEs for sustainability: Drivers, Constraints and
Policies, OECD SME and Entrepreneurship Papers (2022)
• No net zero without SMEs: Exploring the key issues for
greening SMEs and green entrepreneurship, OECD SME and
Entrepreneurship Papers (2021)
• www.oecd.org/cfe/smes/financing-smes-sustainability.htm
Celine Kauffmann
Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Celine.Kauffmann@oecd.org
Lucia Cusmano
E-mail: Lucia.Cusmano@oecd.org
© OECD 2023
39
Green finance A number of countries have created official definitions of

sustainable finance as well as more comprehensive classification
systems, referred to as sustainable finance taxonomies. The OECD
and investment report on Developing Sustainable Finance Definitions and

Taxonomies finds that, if appropriately designed, taxonomies can
Achieving the Sustainable Development Goals (SDGs) and long- improve market clarity, bring confidence and assurance to investors,
term climate objectives requires substantial investment globally. and facilitate the measurement and tracking of sustainable finance
Given limited public budget, leveraging private capital will be flows.
crucial for addressing climate change and broader nature and
sustainability challenges. Scaling-up investment for the low-carbon transition will require
mobilising both domestic and international private capital.
The OECD Centre on Green Finance and Investment helps The OECD 2021 Progress Update on De-risking institutional
catalyse and support the transition to investment in green infrastructure catalogues tools and
a green, low-emissions and climate- techniques used by public actors to mitigate project-level risks
resilient economy through the and attract private investment in infrastructure. The Green
development of effective policies, Infrastructure in the Decade for Delivery report provides
institutions and instruments for guidance on policy levers and priorities to scale-up institutional
green finance and investment. investment in green infrastructure in OECD and G20 countries
The Centre provides cross-cutting
analysis at the intersection of Climate is also at the core of work on the Future of Investment
environment, sustainability and Treaties initiative. The project is considering the Paris Agreement
finance. alignment of 2500+ investment treaties (including investment
provisions in trade agreements) with regard their insurance-type
coverage of finance flows (art. 2.1(c) Paris) and treaty impact on
policy space for government climate policies.
© OECD 2023
Biodiversity and ecosystem services, and their related risks, impacts Regions and cities can use their budget to bridge climate funding
and dependencies are currently not integrated into financial on financial gaps. The OECD Subnational Government Climate
valuations. In collaboration with the European Commission (DG Finance Hub provides evidence and support along three main
REFORM) and the Hungarian Central Bank, the OECD has just areas: climate-significant expenditure and investment, revenue
launched a project on Developing a Supervisory Framework for for climate action, and green budgeting practices. The Hub aims to
Financial Risks Stemming from Biodiversity-related Losses. guide policymakers and their partners in enhancing international
The project will develop a supervisory framework to help the and national frameworks, programmes, and fiscal instruments that
Hungarian Central Bank and other central banks assess biodiversity- support subnational climate action, and to build the capacity of
related financial risks in the financial system, including transmission subnational governments to develop and implement their own
channels for physical and transition risks. climate action plans and policies.
The Clean Energy Finance and Investment Mobilisation

(CEFIM) programme activities are designed to support finance and
investment in clean energy according to the specific needs of each
partner country. This includes the CEFIM Clean Energy Finance
and Investment Review and Roadmap, various implementation
support activities, investor dialogues and best practice sharing.
CEFIM programme activities
© OECD 2023
41
To provide a bridge across transition finance initiatives and

frameworks in the private sector, and to increase transparency
and help avoid greenwashing, the OECD Guidance on Transition
Finance presents elements of credible corporate climate transition
plans based on analysis, an industry survey and good practices.
The OECD also monitors developments in Environmental, Social

and Governance (ESG) rating. A growing number of institutional
investors and funds now incorporate various Environmental,
Social and Governance (ESG) investing systems but challenges
remain that hinder the efficacy of such approaches, including data
inconsistencies and unclear ESG criteria.
The OECD Guidelines for Multinational Enterprises and the

OECD Due Diligence guidance for Responsible Business
Conduct (RBC) are government backed recommendations to
businesses on how to address environmental threats - both in
their activities and supply chains - while also contributing to a just
transition. The OECD is developing a number of tools to support
the implementation of OECD due diligence recommendations in
the context of climate change and other key environmental threats.
© OECD 2023
Promoting Sustainable
Investment and Rethinking Six transformative areas to align financial flows
Infrastructure with low-emission, resilient infrastructure
The 9th edition of the flagship OECD Forum

on Green Finance and Investment on
Moving from commitments to actions in BUDGET RESET
Disentangle public Reset the ﬁnancial
the decade for delivery: towards impactful budgets from fossil sytem in line with long-
green and sustainable finance (5-7 October fuel revenues term climate risk and
opportunites
2022), explored how key stakeholders are
responding to the urgent need to ensure that
sustainable investments deliver the impact
and progress required to achieve global
INNOVATE RETHINK
environmental and development objectives.
Unleash innova�on in Rethink
technologies, ins�tu�ons and development ﬁnance
The Forum brought together the most business models for climate
influential global actors from both the public
and private sector to discuss policies and
changes required to foster transformative
investments in the real economy and
achieve low GHG emissions and climate-
resilient development while halting the loss PLAN EMPOWER
of biodiversity and ecosystem services. Plan infrastructure
Build low-emission
for a low-emission and
and resilient urban
The Forum convened a series of high-level resilient future
socie�es
panels and parallel sessions on a wide
range of pressing green and sustainable
finance issues, ranging from the emergence
of transition finance, the evolution of ESG
investing, the integration of biodiversity-
related financial risks, to the gender-
environment nexus.
The Forum welcomed over 100 high-level
speakers and 1800 attendees+ from 130
countries: the participation this year was
higher than ever before.
© OECD 2023
43

• Clean energy finance and investment roadmap of India (2022)
• Framework for industry’s net zero transition (2022)
• Blended finance guidance for clean energy (2022)
• Enabling conditions for bioenergy finance and investment in Colombia (2022)
• OECD Guidance on Transition Finance: Ensuring Credibility of Corporate Climate Transition Plans, Green Finance and Investment (2022)
• Financing a Water Secure Future (2022)
• Aligning Regional and Local Budgets with Green Objectives: Subnational Green Budgeting Practices and Guidelines (2022)
• Clean energy finance and investment policy review of Viet Nam (2021)
• Clean energy finance and investment policy review of Indonesia (2021)
• De-risking institutional investment in green infrastructure: 2021 progress update (2021)
• The role of OECD instruments on responsible business conduct in progressing environmental objectives (2021)
• Green Infrastructure in the Decade for Delivery: Assessing Institutional Investment (2020)
• Developing Sustainable Finance Definitions and Taxonomies (2020)
• www.oecd.org/cgfi
• www.oecd.org/finance/lti
• www.oecd.org/greengrowth/green-investment-banks.htm
• www.oecd.org/cefim/
• www.oecd.org/regional/sngclimatefinancehub.htm
Robert Youngman
E-mail: Robert.Youngman@oecd.org
Cecilia Tam
E-mail: Cecilia.Tam@oecd.org
© OECD 2023
Green public procrurement

Public procurement represents 12% of GDP and nearly 30% of
total government expenditures on average across OECD countries.
This is a clear sign of public procurement’s potential to support
broader policy objectives including that of green growth.
By using their purchasing power to choose goods, services and
works with a reduced environmental impact, governments can
make an important contribution towards sustainability goals. Green
public procurement can be a major driver for innovation, providing
industry with real incentives for developing green products and
services, particularly in sectors where public purchasers represent
a large share of the market (e.g. construction, health services,
or transport). Public procurement could create lead markets for
industrial and construction innovations beyond ongoing efforts to
green public procurement.

• Mainstreaming strategic public procurement to advance regional development (2022)
• Life-Cycle Costing in Public Procurement in Hungary - Stocktaking of Good Practices (2022)
• Integrating Responsible Business Conduct in Public Procurement (2020)
• Sustainable Public Procurement in Norway (2020)
• Public Procurement for Innovation: Good Practices and Strategies, OECD Public Governance
Reviews (2017)
• The Role of Public Procurement in Low-carbon Innovation (2016)
• Going Green: Best Practices for Sustainable Procurement (2015)
• www.oecd.org/gov/public-procurement/green
© OECD 2023
45
Trade and green growth
Achieving greener growth will require innovative goods and services The report Securing reverse supply chains for a resource efficient
to enable factories and buildings to use energy more efficiently, and circular economy focuses on the opportunities and challenges
to reduce air and water pollution, to make the transition to more for governments to facilitate cross-border reverse supply chains and
sustainable uses of energy, and to provide sanitation and clean reverse logistics to close material loops, such as recycling waste and
drinking water. Many of these goods and services will be procured scrap into secondary raw materials, and extending product life by
locally, but some will only be available, or become available more promoting direct reuse, repair, refurbishment and remanufacturing.
cheaply, from foreign suppliers. Trade can help the environment
both through achieving a more efficient use of resources and by The report Incorporating environmental provisions in regional
serving as a conduit for the transfer of environmental technologies. trade agreements in chapters and articles dealing with
Trade can also help scale up sustainable business models and help trade in services explores ways in which RTAs can incorporate
economies shelter negative environmental shocks. environmental objectives in chapters and articles related to: (i)
non-tariff measures, technical-barriers to trade and regulatory co-
Circular economy policies, which largely take place domestically, operation, and (ii) trade in services, respectively.
have important interlinkages with international trade. OECD work
explores how to make circular economy policies and trade policies The report Climate Policy Leadership in an Interconnected
mutually supportive by mapping out potential misalignments and World: What Role for Border Carbon Adjustments? provides a
identifying opportunities to align and strengthen both policy areas. broad and evidence-based analytical perspective of the debate
around the possible role of a Border Carbon Adjustment (BCA)
to deal with climate change. The paper provides an overview of
different policy instruments that can limit carbon leakage, with a
particular focus on the BCA option, and offers a technical review of
the literature and of the legal specificities around BCA as well as of
alternative instruments.
© OECD 2023
The OECD has also been at the forefront of international efforts the volume of trade in environmentally- related goods; tariffs on
to identify and analyse trade in environmental goods and services environmentally-related goods; support measures for fossil fuels;
(EGS). Recent work provides evidence that trade in wind turbines enabling policy and regulatory environment for renewable energy;
provides access to technologies with a level of efficiency that the volume of trade in waste and scrap; and nutrient balances of
cannot be replicated domestically in importing countries. exported grains.
In an effort to better understand the relationship between domestic A retrospective of OECD work on trade and environment was
environmental regulations and international trade policies, the published in 2020. This report highlights the breadth and depth of
OECD has recently engaged in the construction of a set of policy the OECD analysis in this field and provides suggestions for future
indicators on trade and environment. This set of indicators aims to analysis.
shed light on topical debates regarding the interactions between
trade and environmental policies. Issues covered include: carbon
emissions embodied in trade; embodied raw materials in trade;
© OECD 2023
47
Trade in environmental goods

Between 2003 and 2016 international trade in environmentally-related goods (EGs) more than doubled – from USD 531.10
billion to USD 1 261.24 billion – increasing its share in global trade from 7.2% to 8.1%. This robust growth was mostly
driven by three categories of EGs: (i) components of renewable energy plants; (ii) equipment for wastewater management
and treatment; and (iii) management of solid and hazardous waste and recycling systems.
A growing body of literature suggests this growth is partly the result of environmental policies which create markets
for environmental goods and services, and which in turn improve the competitiveness of local firms operating in these
industries. For instance, the more stringent the regulation of the municipal solid waste management sector, the stronger
the trade comparative advantage in related environmental goods, lending support to the argument that a demand for
these goods is created as a result of stricter environmental standards.
Trends in indicators on trade and environment developed at the OECD confirm these results, and suggests that a
strong policy and regulatory environment for the deployment of renewable energy is associated with an increase in the
net exports of equipment for renewable energy plants. Conversely, countries that spend a larger share of their GDP to
support fossil fuels seem to harm the competitiveness of their domestic renewable industry. This effect is particularly
strong in countries outside the OECD area.
© OECD 2023

• Securing reverse supply chains for a resource efficient and circular economy, OECD Trade and Environment Working Papers (2022)
• Incorporating environmental provisions in regional trade agreements in chapters and articles dealing with trade in services, OECD Trade and
Environment Working Papers (2022)
• International trade and circular economy - Policy alignment, OECD Trade and Environment Working Papers (2021)
• Trade as a channel for environmental technologies diffusion, OECD Trade and Environment Working Papers (2021)
• Climate Policy Leadership in an Interconnected World - What Role for Border Carbon Adjustments? (2020)
• Greening regional trade agreements on non-tariff measures through technical barriers to trade and regulatory co-operation, OECD Trade and
• Greening regional trade agreements on investment, OECD Trade and Environment Working Papers (2020)
• New digital technologies to tackle trade in illegal pesticides, OECD Trade and Environment Working Papers (2020)
• Greening regional trade agreements”, OECD Trade and Environment Working Papers (2020)
• The consequences of a more resource efficient and circular economy for international trade patterns: A modelling assessment, OECD
• Trends in policy indicators on trade and environment, OECD Trade and Environment Working Papers (2019)
• www.oecd.org/environment/envtrade
• www.oecd.org/trade/topics/trade-and-the-environment/
Rob Dellink
Environment Directorate Shunta Yamaguchi
E-mail: Rob.Dellink@oecd.org Environment Directorate
E-mail: Shunta.Yamaguchi@oecd.org
Evdokia Moïsé
Trade and Agriculture Directorate Grégoire Garsous
E-mail: Evdokia.Moise@oecd.org Trade and Agriculture Directorate
E-mail: Gregoire.Garsous@oecd.org
© OECD 2023
49
Innovation As the United Nations Decade on Ocean Science for Sustainable

Development begins, the paper A new era of digitalisation for
ocean sustainability? explores recent and likely future digital
for green growth technologies - especially in the field of ocean observation - that
could contribute to ocean sustainability. It examines advances
that could lead to substantial improvements in data collection and
The world faces growing environmental pressures. The next analysis of the impact of climate change and human activity on
decades are critical to ensure a transition to a greener economy, marine ecosystems, while also contributing to the monitoring and
and innovation – the creation and diffusion of new ideas, products, reduction of the ecological footprint of ocean-related economic
processes and methods – is fundamental to this transition. activity.
Innovation covers not only technological innovation but also
innovation in business models, economic and social systems, and Inventive activity in selected environment-related
changes in lifestyles. technologies (High-value inventions (PF2), 3-year moving
average, world total, indexed on 1990=100)
The increase in the use of natural resources and materials in the 900
last century has been unprecedented. Global raw material use 800
700
rose at almost twice the rate of population growth. Digitalisation
600
can contribute to decoupling economic activity from natural 500
resource use and its environmental impacts. Digitalisation for the 400
transition to a resource efficient and circular economy discusses 300
200
the role of digital technologies in addressing market failures for
100
scaling up circular activities and in the effective delivery of circular 0
economy policies.
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Water resource management Climate Change Mi�ga�on
Environmental management All technologies
Source: Haščič, I. and M. Migotto (2015), "Measuring environmental innovation using

patent data", OECD Environment Working Papers, No. 89, OECD Publishing, Paris,
https://doi.org/10.1787/5js009kf48xw-en
© OECD 2023
Innovation is also key to reducing the environmental impacts of The use of agricultural feedstocks for fuel and chemicals, the
plastics. Quantifying environmentally relevant and circular so-called bioeconomy, is an area of great potential and need to
plastic innovation: Historical trends, current landscape and the integrate innovation with sustainability goals. Meeting Policy
role of policy develops new metrics to measure environmentally Challenges for a Sustainable Bioeconomy investigates: the use
relevant plastics innovation, derives trends over time and across of biomass as feedstock; the design and building of biorefineries
countries and analyses empirical links with public policies. for the manufacture of fuels, chemicals and materials, and also
for electricity generation; and the use of biotechnologies such as
The large emissions reductions needed to meet national net-zero synthetic biology, metabolic engineering and gene editing. A major
pledges and the objectives of the Paris agreement require rapid policy challenge remains the promotion of scale-up in better and
and systemic transformation. Coordination across multiple policy more efficient bio-refining.
areas and change in multiple “systems” (e.g. energy, transport,
buildings) is needed to deliver this system-wide transformation.
Mission-oriented innovation approaches (or MOIPs) can help to
promote such systemic change because of their integrated nature.
The on-going program on Mission oriented Innovation Policies
(MOIP) aims to assess the different ways in which mission-oriented
innovation policies are used to tackle the specific challenge of
reducing GHG emissions to combat climate change.
© OECD 2023
51
The OECD has been a pioneer in measuring the pace of innovation Additional on-going projects look at the relationship between
and diffusion through environment-related patents. Patent green innovation, policies and competitiveness. Innovative small
data have been used to empirically assess how public policies companies, often called “start-ups”, are crucial to the development
foster innovation and diffusion, including the effect of policy of highly innovative idea, including for green technologies. Ongoing
design characteristics on innovation rates, the interplay between work aims at providing an in-depth analysis of the green start-up
environmental policy and multilateral environmental agreements ecosystem across countries to understand the conditions needed
and international markets for innovation. Ongoing OECD work aims for small innovative companies to succeed. Additional ongoing
at developing new families of metrics to measure environmental work aims at empirically assessing the economic returns of firms
innovation beyond traditional patent metrics to better cover on innovation in cleaner technologies, and at developing practical
various types and stages of innovation. This new data can improve policy recommendations to support the radical technological
the basis for doing evidence-based assessment of environmental innovation that is necessary to reach climate neutrality.
policies.
© OECD 2023

• Will post-COVID-19 recovery packages acccelarate low-carbon innovation?, OECD Science, Technology and Industry Policy Papers (Fortcoming 2023)
• Digitalisation for the transition to a resource efficient and circular economy, OECD Environment Working Papers (2022)
• Quantifying environmentally relevant and circular plastic innovation: Historical trends, current landscape and the role of policy, OECD Environment Working
Papers (2022)
• A new era of digitalisation for ocean sustainability?: Prospects, benefits, challenges, OECD Science, Technology and Industry Policy Papers (2021)
• Business Models for the Circular Economy (2019)
• Trends in water-related technological innovation. Lessons from patent data (2019)
• Rethinking Innovation for a Sustainable Ocean Economy (2019)
• Innovation policies for sustainable development: Low-carbon energy and smart-city initiatives (2019)
• www.oecd.org/innovation
• www.oecd.org/environment/indicators-modelling-outlooks/green-patents.htm
Antoine Dechezlepretre Philippe Larrue

Directorate for Science, Technology and Innovation Directorate for Science, Technology and Innovation
E-mail: Antoine.Dechezlepretre@oecd.org Email: Philippe.Larrue@oecd.org
James Philp Shardul Agrawala

Directorate for Science, Technology and Innovation Environment Directorate
E-mail: James.Philp@oecd.org Email: Shardul.Agrawala@oecd.org
Mario Cervantes
Directorate for Science, Technology and Innovation
E-mail: Mario.Cervantes@oecd.org
© OECD 2023
53
SPOTLIGHT—Green innovation and the impacts

of economic shocks
The economic shocks caused by the COVID-19 pandemic and Reflecting the multidisciplinary nature of the event, many OECD
Russia’s large-scale aggression against Ukraine are likely to reshape Committees, bodies and initiatives participate in and contribute
the science-policy interface with significant implications for network to the 2022 GGSD Forum, including: Committee on Industry,
zero goals, green growth, and sustainable development. The recent Innovation and Entrepreneurship (CIIE), the Committee for
experience from the government-supported acceleration for Scientific and Technological Policy (CSTP), the Committee on
the development and deployment of vaccines and the renewed SMEs and entrepreneurship (CSMEE), the Environmental Policy
priority given to energy security have provided an impetus to Committee (EPOC), and the Working Party No. 1 on Macroeconomic
mission-oriented innovation approaches to address environmental and Structural Policy Analysis. The Forum also drew on work of
challenges. In addition, the pandemic has severely affected some the International Energy Agency (IEA), as well as perspectives of
vital actors of innovation ecosystems, such as start-ups and small Business at the OECD (BIAC).
and medium-sized enterprises (SMEs), which are also more exposed
to the consequences of high energy prices. Website: oe.cd/ggsd2022
The 2022 Green Growth and Sustainable Development

2022 (GGSD) Forum on Green innovation and the impact of
economic shocks (22-23 November 2022) explored the
#GGSD consequences of these shocks for science, technology, and
Forum innovation policies. Focus themes included: mission-oriented
innovation approaches to accelerate green innovation, low-
carbon hydrogen, bio-economy, green innovation in SMEs,
and international cooperation in science and technology.
© OECD 2023
Green growth of key sectors:

energy, transport, agriculture, industry, tourism
and the ocean economy
It is important to understand the implications of green growth for key sectors such as agriculture, energy, and transport. The main
message arising from OECD sector-specific work to date is that, over the longer term, greening these sectors can reinforce environmental
sustainability, economic growth and social well-being. Indeed, green growth is essential to meet the UN 20230 Agenda for Sustainable
Development.
Priority areas where coherent action is required
• Adopt transformative policies: Green policy action could be more efficient and effective if focused on systems as a whole,
so that – by design – systems require less energy and materials, and produce less emissions.
• Increasing productivity in a sustainable way. If resources are used more efficiently, production can be increased to meet
the demands of an expanding population with changing dietary and consumption habits while natural capital is conserved.
Higher priority needs to be given to research, development, innovation, education and information.
• Ensuring that well-functioning markets provide the right signals. Prices that reflect the scarcity value of natural resources
will contribute to greater efficiency. Economically inefficient and environmentally harmful subsidies should be phased-out.
The Polluter Pays Principle needs to be enforced through charges and regulations. Incentives should be provided for maintaining
biodiversity and environmental services.
• Establishing and enforcing well-defined property rights. Over-exploitation can happen when marine resources, land
and forests lack clearly defined rights and ownership.
• Addressing the political economy of reform. Addressing the distributional and competitiveness aspects of policy reform
to meet green growth objectives is essential.
© OECD 2023
55
Energy
Energy is a fundamental input to economic activity. However, a The OECD is working with countries to address misalignments
major transformation is required in the way we produce, deliver between domestic green objectives and existing policies. In
and consume it. The current energy system is largely dependent addition, the Clean Energy Finance and Investment Mobilisation
on fossil fuels, which pollute the air, and contribute significantly (CEFIM) programme aims to strengthen domestic conditions to
to carbon emissions. Improving the environmental performance of attract finance and investments in renewables, energy efficiency
energy transformation and consumption is a cornerstone of any and decarbonisation of industries in emerging countries.
attempt to promote green growth.
Due to its size, complexity, path dependency and reliance on Websites

long- lived assets, the energy sector presents particular challenges • www.iea.org
to achieving green growth. Relevant policies for the energy • www.oecd.org/cefim/
sector can achieve important outcomes including better resource
management, innovation and productivity gains, creating new
markets and industries, and reducing environmental damage.
Broadly, the key policies that are required to set the framework
for the transformation of the energy sector include: pricing
externalities; eliminating fossil-fuel subsidies; radically improving
energy efficiency; and fostering green innovation.
© OECD 2023
Transport The report Redesigning Ireland’s Transport for Net Zero Towards
Systems that Work for People and the Planet adopts a systemic
Transport underpins economic and social development, allowing approach to identify transformative policies to redesign passenger
more efficient allocation of resources. Yet, it is also a major surface transport systems in urban, suburban and rural areas.
contributor to greenhouse gas emissions and air pollution. The report calls for redefining the goal of transport systems as
sustainable accessibility (a combination of mobility and proximity),
The ITF 2021 Transport Outlook shows that total transport and for the prioritisation of three transformative policies (often
activity will more than double and CO2 emissions will increase by absent or at the margin of climate strategies): road space
16% by 2050 compared to 2015 under current policies. However, reallocation, the mainstreaming of shared on-demand transport
more ambitious transport decarbonisation policies could reduce modes (e.g. ebikes), and communication efforts to move away from
transport CO2 emissions by almost 70% in 2050 compared to 2015 car-centric mindsets. The report finds that vehicle electrification
and bring the goal of the Paris Agreement to limit global warming and carbon prices remain necessary, but that their scope is limited
to 1.5˚C into reach. Better-targeted actions to reduce unnecessary if implemented in isolation in car-dependent systems.
travel, shift to more sustainable transport modes, improve energy
efficiency, and rapidly scale up the use of low-carbon vehicles are Users in cities across the globe are rapidly adopting new
needed. Under the theme of “A Just Transition”, the ITF Transport mobility forms, helped by digital connectivity and electrification
Outlook 2023 examines the impacts of different policy measures technologies. The report Good to Go? Assessing the
on global transport demand and emissions over the next three Environmental Performance of New Mobility examines the life-
decades to 2050. As in previous editions, the analysis covers cycle performance of a range of new vehicles and services based
passenger and freight transport across all transport modes. on their technical characteristics, operation and maintenance, and
compares it with that of privately owned cars and public transport.
© OECD 2023
57
Several OECD and ITF reports focused on the challenges to adopt Fuel efficiency of conventional private vehicles is a key input in the
more sustainable transport modes in specific cities. The report design of several economic and environmental policies. Ongoing
Shared Mobility Simulations for Lyon develops five different work examines the evolution of fuel efficiency using data on cars
scenarios for shared mobility modes in the Lyon metropolitan entering the US market from 1984 to 2020 to isolate autonomous
area to weigh opportunities and challenges created by new shared technical change from the impact of environmentally relevant
transport services. policies. The study finds that 40% of the observed progress that
occurred can be attributed to regulatory policies, such as CAFE
The report Decarbonising Urban Mobility with Land Use and standards, and to drastic increases in gasoline costs.
Transport Policies: The case of Auckland, New Zealand provides
an evidence-based assessment of policies aiming to decarbonise Beyond road transport, policy action focuses also on the greening
urban passenger transport. The study examines the environmental of aviation and maritime transport. Maritime transport accounts
effectiveness and the economic implications of various instruments, for about 2.5% of global greenhouse gas emissions. The report
such as subsidies to public transport and electric vehicles, and road on Shipbuilding Market Developments includes an analysis on
pricing. The report also investigates the complementary role of how the new environmental regulation for the maritime sector
planning policies fostering urban development patterns in which is expected to impact ship retrofitting and replacement. The
public transport and soft mobility can proliferate. shipbuilding sector has started to produce greener ship in the future
using alternative fuels such as hydrogen, ammonia and methanol.
The paper Tackling Air Pollution in Dense Urban Areas: The case
of Santiago, Chile expands the analysis to urban areas that are less Carbon Pricing in Shipping explores the effectiveness of carbon
dependent on car but face challenges in reducing transport-related pricing, how it might be applied to the shipping sector and with
air pollution. what effects. It also evaluates recent proposals by countries to
introduce a price on shipping’s carbon emissions and examines
related policy issues.
The International Transport Forum (ITF) at the OECD is an intergovernmental organisation with
60 member countries. It acts as a think tank for transport policy and organises the Annual Summit
of transport ministers. ITF is the only global body that covers all transport modes. Its mission is
to foster a deeper understanding of the role of transport in economic growth, environmental
© OECD 2023 sustainability and social inclusion and to raise the public profile of transport policy.
Aviation’s contribution to global greenhouse gas emissions (GHGs) is The project Decarboning Transport in Emerging Economies
high and projected to grow. The OECD is improving and expanding helps countries identify effective measures and pathways to
publication of air emission accounts (AEAs), including of air emissions reduce transport CO2 emissions. Focusing on Argentina, Azerbaijan,
from air transport estimates, with statistics available on a monthly India, and Morocco, the initiative develops tailored quantitative
basis. The paper Greening international aviation post COVID-19 assessment frameworks, enhances national capacity, and facilitates
What role for kerosene taxes? highlights the contribution policy dialogues on the transport sector’s role in national CO2
that kerosene taxes could make to strengthen the incentives for reduction commitments.
investment and innovation in clean aviation technologies. Where
legal obstacles to taxing kerosene exist, these can be overcome by
renegotiating the relevant air service agreements..

• Carbon Pricing in Shipping (2022) Elisabeth Windisch
• Redesigning Ireland’s Transport for Net Zero: Towards Systems that Work for People International Transport Forum
• and the Planet (2022) E-mail: Elisabeth.Windisch@itf-oecd.org
• Shipbuilding market developments, first semester 2022, OECD science, technology and industry policy
Aimee Aguilar Jaber
papers (2022)
• ITF 2021 Transport Outlook (2021)
E-mail:Aimee.AguilarJaber@oecd.org
• Greening international aviation post COVID-19: What role for kerosene taxes? OECD Taxation Working
Papers (2021) Ioannis Tikoudis
• Decarbonising Urban Mobility with Land Use and Transport Policies: The Case of Auckland, New Environment Directorate
Zealand (2020) E-mail:Ioannis.Tikoudis@oecd.org
• Decarbonising Maritime Transport: Pathways to zero-carbon shipping by 2035, OECD-ITF (2018)
• The Cost of Air Pollution: Health Impacts of Road Transport (2014)
• www.oecd.org/environment/greening-transport
• www.itf-oecd.org
• www.itf-oecd.org/dtee
© OECD 2023
59
Agriculture The OECD-FAO Agricultural Outlook 2022-2031 provides a

consensus assessment of the ten-year prospects for agricultural
Food systems around the world face the triple challenge of providing commodity and fish markets at national, regional, and global levels.
food security and nutrition for a growing global population; Projections suggest that overall agricultural productivity would
supporting livelihoods for those working along the food supply need to increase by 28% over the next decade to oo achieve the
chain; and contributing to environmental sustainability. Zero Hunger target while reducing direct greenhouse gas emissions
by 6%.
The Trade and Agriculture Directorate leads work to strengthen
policies to reinforce the positive impacts of agriculture on the Better policies and measurement are critical to making progress
environment, and to develop and collect agri-environmental along all dimensions of the triple challenge. The report Agricultural
indicators. Current work focuses on improving sustainability in food Total Factor Productivity and the environment - A guide to
and agriculture, including: i) deepening the framework for analysing emerging best practices in measurement provides an overview
policies for innovation, productivity, sustainability and of the current practises in measuring sustainable productivity of
resilience in the food system by strengthening policy coherence; the agricultural sector, and presents recommendations on how
ii) analysing the environmental effects of agriculture policies; to improve the measurement of sustainable productivity beyond
continuing the analytical work of the Network on Agricultural the traditional calculation of TFP, accounting for environmental
Total Factor Productivity and the Environment; updating the outcomes. The report Characterising agri-environmental policies
OECD agri-environmental indicators; and examining new policy - towards measuring their progress proposes a taxonomy of
challenges from emerging technologies in agriculture, including policy design features for agri-environmental payment schemes.
the implications of bioeconomy for the sustainability of the food
system.
© OECD 2023
OECD WORK ON Green
GreenGrowth
Growth 60
Net soil carbon sequestration (SCS), which occurs when the Key Publications and website
difference between CO2 removals and CO2 emissions is positives, • OECD-FAO Agricultural Outlook 2022-2031 (2022)
will likely need to play a key role in meeting the Paris agreement • Agricultural Total Factor Productivity and the environment: A guide to
objectives. The OECD has reviewed practices available and emerging best practices in measurement, OECD Food, Agriculture and
highlighted policy package for enhancing net SCS in agricultural Fisheries Papers (2022)
soils, including regulations and knowledge transfer policies. • Soil carbon sequestration by agriculture: Policy options, OECD Food,
Agriculture and Fisheries Paper (2022)
Policies need also strengthening resilience of agricultural sector to • Characterising agri-environmental policies: Towards measuring their
climate change and biodiversity loss. Increasing weather variability, progress, OECD Food, Agriculture and Fisheries Papers (2021)
natural hazards, and news pests and diseases require public and • Innovation, Productivity and Sustainability in Food and Agriculture (2019)
private actors to place a greater emphasis on ex ante risk reduction • Evaluating the environmental impacts of agriculture policies, Agriculture
measures and investments. The OECD framework for applying and Fisheries Papers (2019)
resilience thinking to risk management in agriculture has been • www.oecd.org/agriculture/
applied to assess how four OECD countries are mainstreaming
resilience into their agricultural risk management policy frameworks.
An upcoming publication will focus on climate change adaptation
policies to foster resilience in agriculture.
The OECD will also continue looking at responses to the climate Contact for more information
change and water challenges for the sector, analysing the
Guillaume Gruère
economic effects of climate mitigation strategies in agriculture,
Trade and Agriculture Directorate
and investigating political reform pathways to improve agriculture
E-mail: Guillaume.Gruere@oecd.org
water use.
© OECD 2023
61
Greening the Ocean Economy

A healthy ocean is central to the future welfare and prosperity of
humankind. Not only does it play an essential role in mitigating
carbon emissions and generating the oxygen needed for life
on earth, it also nurtures rich biodiverse habitats and provides
invaluable ecosystem services, including food provisioning,
coastal protection and recreational benefits. The ocean therefore
also provides valuable opportunities for economic growth,
development, and employment.
Yet, the ocean is facing unprecedented pressures from human

activities, including pollution from plastics, over-exploitation of
fish, offshore oil and gas development, shipping, sewage, fertiliser
and agricultural runoff. As a result, the state of marine biodiversity
and ecosystems is degrading at an alarming rate.
OECD work on the ocean spans across
The OECD is supporting governments to address pressures and multiple directorates and reflects an
negative effects of cumulative ocean pollution and economic integrated “whole-of-government”
activity on human well-being and ecosystem health. For instance, approach to respond to complex
it helps to identify and promote policy that can effectively ensure challenges by mobilising expertise
that fisheries and aquaculture are environmentally, economically, across many policy fronts, covering
and socially sustainable. The OECD Review of Fisheries 2022 brings environmental, economic, financial and
together available data on fish stock health, fisheries management, social dimensions.
and support to fisheries to assess the health of fisheries and
investigate how public policies could better support fisheries’
contribution to global food security and the ocean economy.
© OECD 2023
The OECD also provides policy insights on managing and preventing

water pollution and marine plastic waste. The recently released
Global Plastics Outlook finds that, globally, the annual production
of plastics has doubled, soaring to 460 Mt and 6.1 Mt of plastic
waste leaked into rivers, lakes and the ocean. The report also
identifies effective policies to curb the plastic pollution curve.
Realising the potential of the ocean economy while protecting

ocean resources and marine ecosystems is a significant and growing
challenge. The ocean economy is defined by the OECD as the sum
of the economic activities of ocean-based industries, together with
the assets, goods and services provided by marine ecosystems. To
support governments in the transition to a more sustainable ocean
economy, the OECD is mobilising expertise across relevant ocean-
based sectors, covering environmental, economic, financial and
social dimensions.
The OECD projects a doubling of the ocean economy from 2010

to 2030, reaching USD 3 trillion and employing 40 million people.
Despite the COVID-19 pandemic slowdown, 2021 showed a renewed
OECD analysis and guidance supports growth for many ocean-based industries. The interdependency
countries to fulfil their international of ocean-based industries and marine ecosystems has led to a
commitments on the ocean including growing recognition of the need for an integrated approach to
Sustainable Development Goal (SDG) 14 ocean management. The OECD contributes to such efforts by
on Life Below Water, the Convention on drawing from a range of work – including marine biodiversity and
Biological Diversity, the United Nations ecosystem services, climate, pollution, infrastructure resilience and
Convention on the Law of the Sea and the sustainable ocean finance.
Paris Agreement on climate change.
© OECD 2023
63
The first step to realise the potential of the ocean economy is The sustainable development of the ocean economy is particularly
the collection of reliable and timely data on the sustainability relevant for developing countries, as they are on average more
of the ocean economy, the well-being and resilience of coastal reliant on ocean economy sectors than high-income countries.
communities, and the health of marine ecosystems. The OECD Yet, they only capture a small fraction of the global value added
contributes to this directly via its Sustainable Ocean Economy from the ocean economy. The OECD Sustainable Ocean for All
Database, which helps support SDG 14. Additionally, as the Initiative produced a comprehensive report quantifying the
knowledge base on marine ecosystems’ accounting builds, countries economic trends of the ocean economy across developing countries
could greatly benefit from refining the international environmental and identifying existing and innovative policy and financing tools
accounting guidelines and marine ecosystem services’ classification. to enhance its sustainability. In 2021, the “Blue Recovery Hubs”
The OECD is currently developing an experimental OECD satellite project was launched to assist developing countries in restarting
accounts on ocean economic activities to improve international and transforming their ocean economy sectors.
comparability and as a building block to a future ocean account.
Lastly, a new OECD foresight exercise, launched in 2022, will Recognising that healthy oceans depend on decisions taken on land,
provide a global outlook on the future of the ocean economy and the OECD project on Cities and Regions for a Blue Economy
develop key trends and data projections on the ocean economy to supports national and subnational governments in achieving
2045. resilient, inclusive, sustainable and circular blue economies. The
2022 OECD Global Survey on Localising the Blue Economy,
which collected 56 responses from subnational governments from
30 OECD and non-OECD countries, highlights the need to apply
a functional lens to the blue economy, developing city-basin
interlinkages on the ground.
© OECD 2023

Key Publications, websites and databases
• Global Plastic Outlook: Policy Scenarios to 2060 (2022) Claire Jolly
• Global Plastic Outlook: Economic Drivers, Environmental Impacts Science, Technology and Innovation Directorate
and Policy Options (2022) Email: Claire.jolly@oecd.org
• Eliminating government support to illegal, unreported and
unregulated fishing (2022) Claire Delpeuch
Trade and Agriculture Directorate
• Review of Fisheries (2022)
Email: claire.delpeuch@oecd.org
• International effects of fisheries support policies (2022)
• The role of development co-operation in tackling plastic pollution
Will Symes
(2022) Trade and Agriculture Directorate
• COVID-19: Toward a Blue Recovery in Small Island Developing Email: Will.Symes@oecd.org
State (2021)
• Development co-operation for a sustainable ocean economy in Katia Karousakis
2019: a snapshot (2021) Environment Directorate
• Cities and Regions for a Blue Economy (2021) Email: Katia.Karousakis@oecd.org
• Blueprint for improved measurement of the international ocean
economy: an exploration of satellite accounting for ocean Peter Borkey
economic activity (2021)
Email: Peter.Borkey@oecd.org
• Sustainable Ocean for All: Harnessing the Benefits of Sustainable
Ocean Economies for Developing Counties (2020)
Ivan Haščič
• Marine Protected Areas: Economics Management and Effective Environment Directorate
Policy Mixes (2017) Email: Ivan.Hascic@oecd.org
• Ocean Economy in 2030 (2016)
• www.oecd.org/ocean Piera Tortora
• http://oe.cd/fisheries-aquaculture Development Co-operation Directorate
• http://oe.cd/fse-stats Email: Piera.Tortora@oecd.org
Oriana Romano
Email: Oriana.Romano@oecd.org
© OECD 2023
65
Industry
The manufacturing industry is a major source of global carbon Low-carbon hydrogen plays a key role the net-zero transition of
dioxide emissions accounting for around 40% of the total. The several sectors. OECD work has recently focused on the industrial
shift to a circular and low-carbon production method is needed policies in place to support low-carbon hydrogen development
to meet the UN 2030 Sustainable Development Goals and the across countries. It concludes that a five-pronged approach
objectives of the Paris Agreement. The greening of industry implies would be need to accelerate its adoption: 1) supporting R&D and
a deep transformation, as well as multiple challenges. These include demonstration projects; 2) increasing the supply of renewable
scaling-up innovative technologies, investments, competitiveness, electricity; 3) introduce a comprehensive policy package, including
ensuring a global playing field, developing markets for green steel, carbon pricing and the phasing out of inefficient fossil fuel subsidies;
and social aspects. 4) reducing uncertainty, for instance by promoting international
standardisation; and 5) considering blue hydrogen as a short-term
The OECD undertook a comprehensive assessment of the existing option to facilitate the transition to green hydrogen.
policy package in the Netherlands to evaluate its consistency and
cost-effectiveness to reach its 2050 decarbonisation objectives in
the manufacturing sector. The analysis highlights the importance
of combining a strong commitment to raising carbon prices with
ambitious technology support (for mature and radically new
technologies, such as hydrogen). The review illustrates the trade-
off between short-term emissions cuts and longer-term technology
shift, as well as the consequences of competitiveness provisions on
reaching long-term climate goals.
© OECD 2023
The report on Green hydrogen opportunities for emerging and The highly competitive and greenhouse gas intensive nature of steel
developing economies presents a value chain approach to identify production makes its decarbonisation particularly challenging. To
priority areas for developing national hydrogen strategies, focusing support governments in addressing such challenges, the OECD steel
on emerging and developing economies. policy community – comprising the OECD Steel Committee and
the Global Forum on Excess Capacity - provides a unique forum for
The larger adoption of hydrogen in production and consumption dialogue, sectoral expertise, and policy focus. Recent contributions
process brought by the green transition may require the update pertain indicators for measuring steel decarbonisation progress, a
of risk and safety procedures. The project on Precaution in the brief supporting the COP27 Presidency’s call for implementation,
energy transition and improved knowledge for hydrogen and the monitoring of low-carbon emission steel projects.
risk regulation aims at fostering the energy transition in the
Netherlands by providing adequate precaution recommendations In addition, the OECD steel policy community has convened
and enhanced risk knowledge on hydrogen applications, and governments, industry and steel experts to further multi stakeholder
envisages the development of a risk-based regulatory framework dialogue. Forthcoming OECD Steel Committee’s decarbonisation
to facilitate the further use of hydrogen as an energy carrier to agenda will explore scrap and the circular economy, hydrogen as
consolidate the hydrogen economy. The programme on chemical a new strategic input, and how steel firms are shifting to the low-
accident prevention, preparedness and response is investigating carbon transition. In addition, the OECD steel policy community is
emerging trends in accidents from the energy transition, with a considering positioning as a platform to accelerate cooperation and
final report on current chemical accident trends and specific risk implementation of steel decarbonisation.
considerations for future applications of new energy sources to be
published in 2023.
© OECD 2023
67

• Green hydrogen opportunities for emerging and developing economies, OECD Environment Working Papers (2022)
• Assessing Steel Decarbonisation Progress – Ready for the decade of delivery? (2022)
• Innovation and industrial policies for green hydrogen, OECD Science, Technology and Industry Policy Papers (2022)
• Policies for a Carbon-Neutral Industry in the Netherlands (2021)
• www.steelforum.org
Deger Saygin Antoine Dechezlepretre Bertrand Dagallier

Environment Directorate Directorate for Science, Technology and Environment Directorate
E-mail: Deger.Saygin@oecd.org Innovation E-mail : Bertrand.Dagallier@oecd.org
E-mail: Antoine.Dechezlepretre@oecd.org
Joseph Cordonnier Marie-Ange Baucher
Environment Directorate Anthony De Carvalho Environment Directorate
E-mail: Joseph.Cordonnier@oecd.org Directorate for Science, Technology and E-mail: Marie-Ange.Baucher@oecd.org
Innovation
E-mail: Anthony.Decarvalho@oecd.org Giuseppa Ottimofiore
Directorate for Public Governance
E-mail: Giuseppa.Ottimofiore@oecd.org
© OECD 2023
Tourism to the greener business models and destinations needed to

transform the tourism system, and deliver sustainable outcomes
Tourism can play a key role to deliver on the objectives of the UN in the longer term. The chapter builds on discussion at the Global
2030 Agenda for Sustainable Development, by contributing to Forum on Tourism Statistics, Knowledge and Policies hosted by
local development, job creation, and the green transition. However, Korea in November 2021, on the opportunity presented by the
despite progress, tourism development has been economically, disruption from the COVID-19 pandemic, to shift to a greener, more
socially and environmentally unbalanced in many regions. More sustainable model of tourism.
needs to be done to embed environmental objectives into tourism
policies. The OECD is also providing tailored support to the recovery
and reform agenda in 7 European countries, to promote a more
The OECD is engaged with Member and Partner countries to ensure sustainable tourism ecosystem, including work to upgrade
that policies to restart the Tourism sector after the COVID-19 tourism statistics to include sustainability, put in place sustainable
pandemic can also contribute to make the sector more sustainable destination management and monitoring tools, and develop
and inclusive. The OECD G20 Rome guidelines for the future of sustainable tourism indicators.
tourism, which were endorsed in the Rome Communiqué of the
2021 G20 Tourism Ministers’ meeting, identify key issues and Key Publications
opportunities to rethink and reshape tourism policy in response to • Tourism Trends and Policies (2022)
the impacts of the COVID-19 pandemic. • Managing tourism development for sustainable and inclusive
recovery (2021)
The report Managing tourism development for sustainable and • G20 Rome guidelines for the future of tourism (2021)
inclusive recovery highlights five main policies to help rebuilding • Global Forum on Tourism Statistics, Knowledge and Policies
the tourism sector for a sustainable recovery. The report also Highlights (2021)
presents a selection of 9 case studies on destination strategies to
support a sustainable and inclusive recovery.
Jane Stacey
The 2022 edition of OECD Tourism Trends and Policies includes a Centre for Entrepreneurship, SMEs, Regions and Cities
thematic chapter focused on Promoting a Green Tourism Recovery. Email: Jane.Stacey@oecd.org
It highlights key policy considerations to promote the transition
© OECD 2023
69
A nature-positive economy:
biodiversity, ecosystem services and water
Biodiversity and ecosystem services OECD analysis focuses on the economic aspects of biodiversity
and aims at enhancing understanding of how biodiversity and
Biodiversity – covering species, ecosystems and genetic diversity associated ecosystems can be valued, and how these values can
- underpins all life and provides vital benefits to our societies and be captured through policy instruments and incentives to support
economies. Yet, pressures from land- and sea-use change, over- biodiversity conservation and sustainable use. The objective is to
exploitation of natural resources, pollution and climate change are promote policies that are environmentally effective, economically
contributing to an alarming loss of biological diversity. In line with efficient and distributionally equitable.
the Convention on Biological Diversity (CBD), the 2030 Agenda for
Sustainable Development places strong emphasis on biodiversity Given on-going and projected trends in biodiversity loss and
for achieving global goals for people and planet. degradation, there is an urgent need for: greater and more ambitious
use of policies including economic instruments, more cost-effective
use of existing finance for biodiversity, and mainstreaming of
biodiversity across sectors of the economy.
© OECD 2023
OECD work on biodiversity also supports the UN Convention on OECD work also focuses on tracking economic instruments and the
Biological Diversity, and has provided analysis relevant to the post- finance they mobilise for biodiversity. These policy instruments
2020 Global Biodiversity Framework and CBD COP15 in December include biodiversity-relevant taxes, fees and charges, positive
2022. Work on The Post-2020 biodiversity framework: targets, subsidies and tradable permits. This work serves to monitor
indicators and measurability implications at global and progress towards the implementation of the OECD Council
national level, put forward the concept of headline indicators, as Recommendation on the Use of Economic Instruments to
a means to ensure more consistent and comparable monitoring of Promote Biodiversity Conservation and Sustainable Use.
progress towards individual targets across countries. The data was used to monitor progress towards Aichi Target 3 on
incentives and Target 20 on resource mobilisation under the previous
The OECD released Biodiversity: Finance and the Economic 2011-2020 Strategic Plan for Biodiversity under the CBD, and will
and Business Case for Action, which was launched at the G7 be relevant to the Post-2020 Global Biodiversity Framework. Latest
Environment Ministers’ Meeting in Metz, France in May 2019. trends are provided in Tracking Economic Instruments and Finance
A follow on report on A Comprehensive Overview of Global for Biodiversity – 2021, which also covers new data on payments
Biodiversity Finance, covering public, private, domestic and for ecosystem services and biodiversity offsets.
international finance flows to protect biodiversity, was released in
2020. Work has also focused on incentives harmful to biodiversity. A new
report, Identifying and assessing incentives, including subsidies,
More recently, the OECD released in 2021 a report on Biodiversity, harmful to biodiversity at national level: A comparative review
Natural Capital and the Economy: A Policy Guide for Finance, of existing national level assessments and insights for good
Economic and Environment Ministers, which was prepared at practice, was released in 2022.
the request of the UK G7 Presidency. The report provides the
latest findings and policy guidance for G7 and other countries to
underpin transformative domestic action to address biodiversity
loss in four key areas: measuring and mainstreaming biodiversity;
aligning budgetary and fiscal policy with biodiversity; embedding
biodiversity in the financial sector; and improving biodiversity
outcomes linked to international trade.
© OECD 2023
71
Sub-national governments have a key role in addressing biodiversity On-going work on biodiversity is focusing on mainstreaming
loss. Drawing on policy practices from Scotland (UK), France and biodiversity in renewable energy infrastructure, and biodiversity in
other signatories to the Edinburgh Declaration, Enhancing the green budget tagging.
effectiveness of sub-national biodiversity policy - Practices
in France and Scotland, United Kingdom examines governance
and institutional issues as well as the policy instruments that Number of countries with biodiversity-relevant
subnational governments can leverage to deliver positive economic instruments
biodiversity outcomes. 70
60
Number of countries
Biodiversity loss and climate change are closely linked. Climate 50
change is one of the five key pressures on biodiversity loss while 40
30
degradation and loss of ecosystems can result in significant
20
greenhouse gas emissions. At the same time, biodiversity and
10
ecosystem services play an important role in helping people
0
adapt to the impacts of climate change, and reducing the risk 1980 1985 1990 1995 2000 2005 2010 2015 2020
of climate-related disasters. Towards Sustainable Land Use: Taxes Fees and Charges Tradable Permits Environmentally-mo�vated subsidies
Aligning Biodiversity, Climate and Food Policies examines Source: OECD PINE database, accessed 28 July 2021
on-going challenges for aligning land-use policy with climate, https://www.oecd.org/environment/indicators-modelling-outlooks/policy-instrument-database/
biodiversity and food objectives, and the opportunities to enhance

the sustainability of land-use systems. Adapting to a Changing
Climate in the Management of Coastal Zones highlights how
coastal ecosystems, such as mangroves, provide significant
benefits, including decreasing the impact of coastal flooding.
Scaling up Nature-based Solutions to Tackle Water-related
Climate Risks: Insights from Mexico and the United Kingdom
examines good practices for scaling up nature-based solution for
adaptation to climate change.
© OECD 2023

• Mainstreaming Biodiversity in Infrastructure (Forthcoming 2023)
• Identifying and assessing subsidies and other incentives harmful to biodiversity: OECD Environment Working Papers, OECD Environment Policy
Papers (2022)
• Biodiversity, Natural Capital and the Economy: A Policy Guide for Finance, Economic and Environment Ministers, OECD Environment Policy
Papers (2021)
• Tracking Economic Instruments and Finance for Biodiversity, (2021)
• Adapting to a changing climate in the management of coastal zones, OECD Environment Policy Papers (2021)
• Enhancing the effectiveness of sub-national biodiversity policy, OECD Regional Development Papers (2021)
• A Comprehensive Overview of Global Biodiversity Finance (2020)
• Towards Sustainable Land Use: Aligning Biodiversity, Climate and Food Policies (2020)
• The Post-2020 Biodiversity Framework: Targets, indicators and measurability implications at global and national level (2019)
• http://oe.cd/biodiversity
• http://oe.cd/BLUE
Katia Karousakis
E-mail: Katia.Karousakis@oecd.org
© OECD 2023
73
Managing water for green growth Recognising that water crises are often primarily governance
crises, the OECD Water Governance Initiative was set up as an
international multi-stakeholder network where delegates from
The UN 2030 Sustainable Development Agenda recognises public, private and non- profit sectors share good water governance
the critical contribution of water to sustainable development. practices. It has led to the development of the OECD Principles on
However, investment in waster security falls short of global needs Water Governance in 2015, the OECD Water Governance Indicators
and the impacts on communities, economies and the environment in 2018 and the “How To Assess water Governance” guide in 2022.
are significant. The OECD Policy Perspectives on Water, Growth
and Finance explains that this does not result from a shortage of The OECD supports ambitious water policy reforms in selected
finance, but from inadequate risk-return profiles of infrastructure countries, on demand. These combine robust analyses of water
projects in the water sector. economics and governance with insights from international
practitioners, in the framework of national policy dialogues on
In 2017, the OECD established the Roundtable on Financing water. Over the past decade, Water Policy Dialogues have been
Water to facilitate dialogues between the water and finance undertaken in Mexico, the Netherlands, Brazil, Korea, Argentina,
communities on how to overcome the global challenges of financing Peru. They have helped to inform the water policy reform agenda.
investments that contribute to water security and sustainable
growth. Specifically, the Roundtable: i) tracks water- related The OECD also provides support to the transition economies
financing needs and capacities in different regions of the world; ii) of Eastern Europe, the Caucasus and Central Asia to improve
develops policy recommendations to mobilise private finance (e.g. their environmental and water policies, integrate environmental
through blending development finance with domestic commercial considerations into the processes of economic, social and
finance); and iii) analyses how to ensure that available finance goes political reform and gradually shift to a green growth and
to projects which are not merely bankable but deliver tangible sustainable development model. As a key implementing partner
benefits in terms of water security and sustainable development. of the European Union for Environment Water Resources and
The Roundtable embarked on a series of regional meetings Environmental Data Programme (EU4Environment – Water
(covering North and Latin America and Asia in 2019, other regions and Data), OECD work on policy reforms in this region are aimed
in 2020) for more tailored discussions on issues and opportunities. at the economic and financial dimensions of sustainable water
resources management, the reform of water supply and sanitation
systems, and enhanced transboundary co-operation in water
basins.
© OECD 2023

• Financing a Water Secure Future, OECD Studies on Water (2022)
• Reform of Water Supply and Wastewater Treatment in Lithuania, OECD Studies on Water (2022)
• Towards Sustainable Water Services in Estonia, OECD Studies on Water (2022)
• Managing and Financing Water for Growth in Thailand, OECD Studies on Water (2022)
• Financing a Water Secure Future, OECD Studies on Water (2022)
• Fostering Water Resilience in Brazil, OECD Studies on Water (2022)
• How To Assess water Governance, OECD Studies on Water (2022)
• Developing a Water Policy Outlook for Georgia, the Republic of Moldova and Ukraine, OECD Studies on Water (2021)
• Water Governance in Peru, OECD Studies on Water (2021)
• Water Governance in African Cities OECD Studies on Water (2021)
• Water Governance in Cape Town, South Africa OECD Studies on Water (2021)
• www.oecd.org/water
• www.oecd.org/environment/outreach/water-eecca/
Xavier Leflaive
E-mail: Xavier.Leflaive@oecd.org
Matthew Griffiths
E-mail: Matthew.Griffiths@oecd.org
Oriana Romano
E-mail: Oriana.Romano@oecd.org
© OECD 2023
75
Greening regions, cities and communities

Inclusive green growth in cities
and regions
More than half the people in the world live in or near cities today. The 2021 Regional Outlook - Addressing COVID-19 and Moving
By the middle of the century, urban areas will be home to over to Net Zero Greenhouse Gas Emissions analyses the different
two-thirds of the global population and a large share of economic territorial impacts of COVID-19 on health and economy and the
activity. The OECD work on urban and regional development finds different territorial implications of moving to net-zero greenhouse
that appropriate local policies can help generate growth and jobs gas emissions by 2050 whilst adapting to climate change. Building
while becoming greener. on these insights, it provides guidance for integrating the climate
challenge into multi-level governance, urban and rural development
so as to leave no region behind. The report also highlights the
opportunity to draw lessons from COVID-19 for a place-based
response to the climate challenge.
© OECD 2023
The OECD Programme on the Circular Economy in Cities and The Building decarbonisation in cities and regions project
Regions supports national, regional and local governments in their focuses on the role of the building sectors for meeting net-zero
transition towards a circular economy by: supporting multi-level targets. The project started in 2021 with a multi-level governance
dialogues; providing an international network, where regions and framework to guide building policies, including energy efficient
cities can share knowledge, experiences and good practices with a retrofits, installing high performance equipment and promoting
wide range of stakeholders; and facilitating the uptake of the OECD renewable energy. Besides saving energy and reducing CO2
Scoreboard on the Governance of the Circular Economy. emissions, decarbonising buildings also brings multiple benefits
such as reducing energy bills, improving health and creating green
The OECD Programme A territorial approach to climate action jobs. Using the framework as a foundation, the project provides
and resilience supports countries, regions and cities in their efforts more specific place-based analysis taking into account regional
to develop and implement their climate plans, strategies and policy differences.
instruments. The programme seeks to demonstrate the potential of
subnational action by strengthening local understanding of climate
change drivers, impact and vulnerabilities; assessing national and
subnational policy and governance frameworks to provide locally-
tailored recommendations; sharing and disseminating innovative
policies, strategies and programmes applying a territorial approach
to drive the zero-carbon transition and climate resilience.
© OECD 2023
77
Mining Regions and cities play a key role in the green inclusive In the broader context of the 2030 Agenda for Sustainable
transition. The OECD Mining Cities and Regions initiative aims Development, the OECD Programme on a Territorial Approach
to develop recommendations for improving regional development to the SDGs seeks to support cities and regions in localising the
outcomes for regions and cities specialised in mining and extractive SDGs, with the participation of 10 pilot cities and regions from
industries by developing a global platform for mining regions and around the world. Recent projects of the framework include
cities through events and peer-review that enable knowledge the Rhine-Neckar Metropolitan Region (2021-2022) and the
sharing, advocacy and dialogue between public/private sectors Autonomous Province of Bolzano (2022).
and local communities on better policies to enhance regional
productivity and wellbeing.

• Decarbonising Buildings in Cities and Regions, OECD Urban Studies (2022)
• OECD Regional Outlook 2021: Addressing COVID-19 and Moving to Net Zero Greenhouse Gas Emissions (2021)
• A Territorial Approach to SDGs, OECD Urban Policy Reviews (2020)
• www.oecd.org/regional/cities/circular-economy-cities.htm
• www.oecd.org/cfe/cities/tacar.htm
• www.oecd.org/fr/regional/mining-regions-cities.htm
• www.oecd.org/dac/financing-sustainable-development/development-finance-topics/small-island-developing-states.htm
Tadashi Matsumoto
Centre for Entrepreneurship, SMEs, Regions and Cities Oriana Romano
E-mail: Tadashi.Matsumoto@oecd.org Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Oriana.Romano@oecd.org
Andrés Fuentes Hutfilter
E-mail: Andres.Fuentes@oecd.org
© OECD 2023
Asia China, Japan and Korea – like many other countries that underwent
periods of rapid industrialisation – share a common story of high
economic growth and intense pollution followed by progressive
The current development of Asia is characterised by a rapid efforts to improve air quality. The critical impact of air pollution
urbanisation, rising economic growth led in most places by the on human health in both developed and developing countries is
manufacturing industry, and a rapidly increasing motorisation. The well-known. Building on the expertise of the OECD Environment
result has been escalating air and water pollution, large greenhouse Policy Committee and the Regulatory Policy Committee, the OECD
gas emissions, increased solid waste generation and plastic brought together policy makers, academics and experts from China,
pollution, sprawling urban development, depletion of natural Japan and Korea to discuss regulatory frameworks, enforcement
resources and deforestation. and co-operation to address air pollution as well as existing
international regulatory co-operation to control trans-boundary air
The development of infrastructure supports Asia’s dynamism pollution in Northeast Asia, North America, and Europe. The report
but also plays a key role in soaring greenhouse gas emissions, air Economic benefits of international co-operation to improve air
pollution and the destruction of ecosystems. To help governments quality in Northeast Asia: A focus on Japan, Korea and China
across Central and Southeast Asia plan, evaluate and finance provides projections of the benefits of policy action up to 2050,
sustainable infrastructure projects in line with long-term and finds that further co-operation to reduce air pollution in the
environmental and development goals, the OECD launched the Northeast Asia region can result in health, environmental and
Sustainable Infrastructure Programme in Asia (SIPA) in 2021. economic benefits.
SIPA provides countries with capacity development and policy
advice at different stages of the infrastructure investment cycle, The OECD also engages with Southeast Asian economies to
focusing on long-term strategic planning, project-level evaluations, support them in the promotion of a sustainable ocean economy
aligning national sectoral policy frameworks (energy, transport, and to address policy challenges related to marine plastic pollution
industry) with the goals of the Paris Agreement and the SDGs as by providing policy guidance and sharing best practices. The ten
well as promoting the adoption of green finance and responsible recently published ASEAN Country Notes map the government
business conduct principles. ministries and departments responsible for managing marine
plastic pollution, the government policies, measures and selected
initiatives to combat marine plastic pollution in those countries.
© OECD 2023
79
The OECD is currently developing a regional scale-down of its Key Publications and website
Global Plastics Outlook report that will be specific to the region. • Southeast Asia Plastics Outlook (forthcoming 2023).
• Economic Outlook for Southeast Asia, China and India 2022:
A sound investment and finance policy framework is a key enabler Financing Sustainable Recovery from COVID-19 (2022)
for the green transition. The 2022 Economic Outlook for Southeast • The economic benefits of international co-operation to improve
Asia, China and India highlights the existing challenges, and policy air quality in Northeast Asia: A focus on Japan, Korea and China
options to support the further development of sovereign green (2022)
bond markets in the region. In addition, the report Strengthening • Environmentally Adjusted Multifactor Productivity in China (2022)
Macroprudential Policies in Emerging Asia: Adapting to Green • Strengthening Macroprudential Policies in Emerging Asia:
Goals and Fintech provides a detailed overview of the current Adapting to Green Goals and Fintech (2021)
macroprudential policy situation in Emerging Asian countries and • Clean Energy Finance and Investment Policy Review of Indonesia
explores how the macroprudential policy toolkit has evolved. In (2021)
particular, the report devotes special attention to macroprudential • Clean Energy Finance and Investment Roadmap of India:
policies for emerging priorities, such as achieving green goals Opportunities to Unlock Finance and Scale up Capital (2021)
and updating regulatory frameworks to reflect ongoing fintech • Enhancing Air Quality in Northeast Asia: Regulatory frameworks,
developments. Furthermore, several countries in the region have enforcement and co-operation (2019)
joined the Clean Energy Finance and Investment Mobilisation • Green Growth Performance Review of Indonesia (2019)
(CEFIM) programme, including India and Indonesia. • www.oecd.org/site/sipa/
• www.oecd.org/cefim/
OECD has worked with the Chinese experts on Environmentally Contact for more information
Adjusted Multifactor Productivity (EAMFP), applying the OECD
measurement framework to national data. The project led to the Virginie Marchal Elisa Lanzi
release of the report on Environmentally Adjusted Multifactor Environment Directorate Environment Directorate
Productivity in China in March 2022, which provides indicators E-mail: Virginie.Marchal@oecd.org E-mail: Elisa.Lanzi@oecd.org
to track the progress towards green growth, including metrics on
the reliance on natural capital and pollution-intensive activities to Eija Kiiskinen
generate income growth.
E-mail: Eija.Kiiskinen@oecd.org
© OECD 2023
Eastern Europe, the Caucasus and The last decade witnessed an accelerated awareness of, and
Central Asia (EECCA) more ambitious response to, local environmental impacts of the
traditional path of economic development and of global trade.
Many countries of EECCA have set and updated national targets
to guide their transition towards a green economy, including on
Since the collapse of the Soviet Union, the countries of Eastern green and sustainable energy, low-carbon economy, and natural
Europe, the Caucasus and Central Asia (Armenia, Azerbaijan, Belarus, resource management. EECCA countries have also significantly
Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Tajikistan, modernised environmental policies and legislation at both strategic
Turkmenistan, Ukraine and Uzbekistan) have been on long journeys and technical levels to make them less costly and complex while
to pursue economic development that is also environmentally not compromising achieving environmental and climate objectives.
sustainable. These developments have been accompanied by the creation
of inter-ministerial co-ordination mechanisms on greening the
economy.
© OECD 2023
81
Most recently, EECCA countries have integrated green stimulus The Task Force has also developed and provided EECCA countries
measures into their response to the COVID-19 pandemic and their with a range of practical tools that support policy decision making,
broader recovery packages. They also have embarked on aligning including for strengthening environmental performance of large
the policy objectives of the financial sector development with their enterprises and SMEs, measuring green growth by using indicators
national climate and environmental targets. and developing green public investment programmes.
Despite progress, the EECCA countries are still facing significant The GREEN Action Task Force work has been carried out in co-
environmental challenges, partly inherited from the Soviet Union operation with OECD member countries, International Financial
and partly newly acquired as a result of new consumption patterns. Institutions and international organisations, such as the UNECE,
They need significant investments and policy reforms to move UNEP and UNIDO.
onto a greener path of economic development.
Since the 1990s, the OECD has supported the EECCA countries in • Green Economy Transition in Eastern Europe, the Caucasus and
developing policies that improve environmental quality and well- Central Asia: Progress and Ways Forward, OECD Green Growth
being, while creating opportunities for strong economic growth Studies
and decent jobs. The long-standing collaboration between the • Towards a Green Economy with EU4Environment in Armenia (2022)
countries of EECCA and the OECD, which has been carried out • Towards a Green Economy with EU4Environment in Azerbaijan (2022)
through the GREEN Action Task Force (previously known as • Towards a Green Economy with EU4Environment in Georgia (2022)
the EAP Task Force), has produced concrete country- and region- • Towards a Green Economy with EU4Environment in Moldova (2022)
specific results such as, for instance, new strategies for greening the • Towards a Green Economy with EU4Environment in Ukraine (2022)
economy, pragmatic reform of policies, regulations and developing • Towards green transformation of Ukraine: State of Play in 2021 (2022)
options for mobilising green finance. • Towards green transformation of the Republic of Moldova: State of Play
in 2021 (2022)
• The environmental compliance assurance system in the Republic of
Moldova: Current situation and recommendations (2022)
• The environmental compliance assurance system in Armenia: Current
situation and recommendations (2022)
© OECD 2023
Key Publications and websites - continued

• Towards a green economy in the Eastern Partner countries with EU4Environment: mid-term achievements (2021)
• Fossil-fuel subsidies in the EU’s Eastern Partner countries (2021)
• Policy Highlights: “Fossil-fuel subsidies in the EU’s Eastern Partner countries in 2020” (2021)
• Accessing and Using Green Finance in the Kyrgyz Republic – Evidence from a Household Survey (2021)
• An Assessment of Investment Needs for Climate Action in Armenia up to 2030 (2021)
• Measuring Green Finance Flows in Kazakhstan (2020)
• SME Policy Index: Eastern Partner Countries 2020 (2020)
• Access to Green Finance for SMEs in Georgia (2019)
• Promoting Clean Urban Public Transportation and Green Investment in Moldova (2019)
• Sustainable Infrastructure for Low-carbon Development in Central Asia and the Caucasus: Hotspot analysis and needs assessment (2019)
• Mining and Green Growth in the EECCA Region (2019)
• Promoting Clean Urban Public Transportation in Kazakhstan, Kyrgyzstan and Moldova – Summary Report of Project Implementation 2016-
2019 (2019)
• Enhancing the Economic Regulatory System for Moldova’s Water Supply and Sanitation (2019)
• Addressing Industrial Air Pollution in Kazakhstan – Reforming Environmental Payments Policy Guidelines (2019)
• www.oecd.org/env/outreach/green-action-task-force/
• www.oecd.org/env/outreach/water-eecca/
• www.oecd.org/site/sipa/
• www.eu4environment.org/

Krzysztof Michalak Matthew Griffiths Virginie Marchal
Environment Directorate Environment Directorate Environment Directorate
E-mail: Krzysztof.Michalak@oecd.org E-mail: Matthew.Griffiths@oecd.org E-mail: Virginie.Marchal@oecd.org
© OECD 2023
83
Latin America and Caribbean

Natural assets have underpinned the economic development in The OECD project Enhancing Green Transition in LAC; From
Latin America and Caribbean, with strong ties to social aspects of Commitments to Action is implementing the Environmental
growth. The increasingly large share of the population exposed sustainability priority of the OECD Latin America and the Caribbean
to the consequences of environmental degradation has escalated Regional Programme (LACRP), with the support of the EU’s Regional
the green growth debate in the region. Concrete steps have been Facility for Development in Transition. The project includes support
taken in Latin America and Caribbean to develop environmental for the development of the LAC Environment at a Glance and Key
strategies for a net-zero carbon economy. Environmental Indicators, and organisation of a series of Regional
Policy Dialogues and Expert Workshops on domestic climate
The OECD is supporting the national efforts in the LAC region change mitigation and adaptation challenges and policy solutions.
to deliver on their sustainable development objectives and
green transition. The Latin American Economic Outlook has Albeit governments throughout LAC have established high-
systematically analysed critical aspects related to sustainable level decarbonisation policies that often focus on solutions like
and inclusive development in Latin America and the Caribbean sustainable bioenergy and waste-to-energy, projects often lack
(LAC) region since its launch in 2007. The 2022 LAC Outlook on access to financing, as identified in the report Enabling conditions
Towards a Green and Just Transition analyses the challenges and for bioenergy finance and investment in Colombia. Through
opportunities of a green and just transition in LAC, and provides five case studies from Brazil, Chile, Colombia, India and Turkey, the
policy recommendations to ensure the wellbeing of citizens and the report considers the enabling environment and lessons learnt from
region’s vast and rich ecosystems. bioenergy developments in different countries.
The report Biodiversity Conservation and Sustainable Use

in Latin America summarises key findings on biodiversity
conservation and sustainable use from the EPRs of Brazil, Chile,
Colombia, Mexico and Peru. The report reviews common challenges,
the strategies being used to tackle them, the gaps that remain and
how these can be addressed.
© OECD 2023

• Environmental Performance Review of Costa Rica, OECD Publishing (forthcoming, 2023)
• Latin American Economic Outlook - Towards a green and just transition (2022)
• Enabling conditions for bioenergy finance and investment in Colombia, Green Finance and Investment (2022)
• Towards Green Growth in Emerging Economies: Evidence from Environmental Performance Reviews (2019)
• Biodiversity Conservation and Sustainable Use in in Latin America: Evidence from Environmental Performance
Reviews (2018)
• www.oecd.org/environment/country-reviews
• www.oecd.org/latin-america/regional-programme/environment/
Eija Kiiskinen
E-mail: Eija.Kiiskinen@oecd.org
© OECD 2023
85
Africa and MENA COP27 returned the annual meeting to Africa for the first time since
2016. The report, West Africa and the global climate agenda,
Commitment towards building climate resilience and achieving a analyses the 17 NDCs of West African countries (as of September
just energy transition is high in the African continent agenda. All 2022) to understand the region’s ambition, financing needs and
54 African countries signed the Paris Agreement and Agenda 2063, potential to implement their Nationally Determined Contributions
which is Africa’s “blueprint and masterplan for transforming the (NDCs). One of the key takeaways is that so far, mobilised finance
continent into the global powerhouse of the future”, addresses has fallen short of the specified needs in the region’s NDCs. West
topics such as climate change, green and blue growth. The OECD African NDCs state that USD 221.2 to 279.7 billion is needed for
is supporting the region in its green transition efforts through mitigation and USD 61.4 to 88.8 billion for adaptation by 2030. So
multiple actions. far, according to OECD estimates, the 17 West African countries
received less than USD 6 million in 2020 of the “100 billion”
Boosting African cities’ resilience to climate change: The role mobilised by developed countries, which is far from meeting the
of green spaces explores the dynamics between urbanisation and region’s needs.
green spaces and highlights that availability of green space can be
expanded by building vertically in increasingly compact African Pricing Greenhouse Gas Emissions: Turning climate targets into
cities. Moreover, the analysis reveals that the availability of green climate action examines carbon pricing policies in 71 countries,
spaces is not the same as proximity. Communities who live further including 12 countries from Africa (Burkina Faso, Côte d’Ivoire,
away from green spaces are less likely to reap their benefit, such as Egypt, Ethiopia, Ghana, Kenya, Madagascar, Morocco, Nigeria,
cooling effects during heat waves. Rwanda, South Africa, Uganda). The report finds that well-
designed energy, carbon tax and subsidy reform can strengthen
The data underpinning this report is freely available on OECD efforts to improve domestic revenue mobilisation. While the
platform Mapping Territorial Transformations in Africa revenue potential varies across countries, it is often substantial.
(MAPTA), which enables users to explore interactive maps on the
sustainability and resilience of African cities. This platform includes
several types of data related to urban forms, street networks, and
pollution to aid actors in decision-making.
© OECD 2023
Revenues from carbon pricing could be used to provide targeted An extensive consultation process is underway between the OECD
support to improve energy access and affordability, enhance social and African stakeholders to strengthen collaboration on several
safety nets, and support other economic and social priorities. For topics, including green growth. Ongoing discussions on the OECD-
example, in Egypt, where a successful fossil fuel subsidies reform Africa Partnership includes how to support the development
generated fiscal savings, the government was able to allocate of policy frameworks to promote green growth and sustainable
more funds to education and health and implement an economic development that is territorially balanced across Africa. In the
stimulus package to recover from the crisis. 2021 MENA-OECD Ministerial Declaration, Ministers announced
their commitment to design and implement a comprehensive
The upcoming Green Growth Policy Review of Egypt (GGPR) will programme of work, in order to promote a strong, resilient, green,
provide an independent, evidence-based and country-tailored and inclusive recovery in the MENA region.
assessment of Egypt’s environmental performance and green
growth policies with targeted recommendations designed to Key Publications and website
help the Egyptian government evaluate progress and identify • West Africa and the global climate agenda, West African Papers
options to achieve its green growth objectives. An in-depth (2022)
chapter will be dedicated to the theme of “Building climate- • Boosting African cities’ resilience to climate change: The role of
smart, resilient and inclusive cities”. The Clean Energy Finance green spaces West African Papers (2022)
and Investment Mobilisation (CEFIM) programme supports the • Towards an OECD Africa partnership (2022)
country in unlocking finance and investment flows to achieve clean • Pricing Greenhouse Gas Emissions: Turning Climate Targets into
energy targets and sustainable finance goals through extensive Climate Action (2022)
stakeholder, implementation-support activities, regional peer- • www.mapping-africa-transformations.org/
learning and investor dialogues. • www.oecd.org/mena/
Brilé Anderson
Sahel and West Africa Club
E-mail: Brile.Anderson@oecd.org
Fianna Jurdant
Global Relation Directorate
E-mail: Fianna.Jurdant@oecd.org © OECD 2023
87
The Green Growth Knowledge Partnership (GGKP)
Since its establishment in 2012, the GGKP has since expanded to include a large,
diverse group of more than 75 Knowledge Partners. It is a network of international
organisations and experts that addresses major knowledge gaps in green growth
theory and practice. The OECD is a founding partner of the GGKP, together with the
Global Green Growth Institute, the UN Environment, the United Nations Industrial
Development, and the World Bank.
By encouraging collaboration and co-ordinated research, the GGKP seeks to

increase the impact of its partners. Through its thematic expert working groups,
the GGKP draws together policy makers, practitioners and academics to assess the
state of knowledge and prioritise knowledge gaps around key green growth topics.
To date, joint research themes have included; metrics and indicators, trade and
competitiveness, fiscal instruments, technology and innovation, gender, behavioural
insights, inclusiveness, and natural capital.
The GGKP hosts three state-of-the-art web platforms, providing easy access to policy
guidance, good practices, tools and data through a searchable e-library with technical
and policy resources as well as data for some 193 countries. Moreover, through its
online interactive Community, Annual Conferences and webinars, the GGKP harnesses
in-person and virtual networks to foster information sharing and learning through the
creation of a vibrant green growth community of practice.
Learn more at: www.greengrowthknowledge.org
© OECD 2023
More information on OECD work on green growth
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into other languages.
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© OECD 2023
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OECD WORK ON

What is green growth and why do we need it?

slowed down in several OECD and non-OECD countries. Monetary x 1.5

policy is being tightened with the aim containing the inflationary 60

*BRIICS: Brazil, Russia, India, Indonesia, China, South Africa

Source: OECD (2019) Global Material Resources Outlook to 2060.

worsening resource bottlenecks, and life-shortening air pollution 60,000

• Human well-being is inherently liked to the environment. 0

capital for natural capital. For instance, if water becomes more

Consistency of actions across all policy domains (e.g. trade,

Productivity growth, green growth and inclusive growth are three

The Green Growth Strategy

Inclusive Forum on Carbon Mitigation Approaches (IFCMA)

Contact for more information

OECD IFCMA team

Contact for more information

Mainstreaming the Green Growth Strategy

The Agenda 2030 for Sustainable Development

SPOTLIGHT—Navigating the twin transitions:

The Green Growth and Sustainable Development Forum (GGSD Forum)...

Learn more on the past GGSD Forums at: www.oe.cd/ggsdForum

Green growth indicators

Highest overall improvements towards green growth,

Green growth indicators are regularly used in OECD country

Inter-Agency and Expert Group on SDG indicators. Low land consumption

Environmentally Environmentally Environmentally Environmentally

Green growth indicators framework

SOCIO-ECONOMIC CONTEXT AND

labour income regulations

energy and raw materials pollution and waste amenities, health

Key Publications and websites

Countries like the Czech Republic,

Green growth in country policy surveillance

Contact for more information

Fiscal policy and green growth

Road transport (CO2)

Large difference among average tax rates on different fuels

Contact for more information

Environmental policies and economic outcomes

effects of environmental policies. It provided quantitative proxies

measuring the stringency and competition - friendliness of 5

environmental policies. In particular, the recently updated indicator

cross-country and over-time measure of the aggregate stringency

Further empirical analysis shows that more stringent environmental

Environmental Policy Stringency (2018 value)

tilting the comparative advantage away from pollution intensive

Contact for more information

Key Publications and websites Shardul Agrawala

A green transition that leaves no one behind

communities as well as the potential distributional consequences related to the

Key Publications and websites

Contact for more information

Shardul Agrawala Nicolina Lamhauge

In developing countries, where the majority of jobs are in the

Contact for more information

Contact for more information

Greening SMEs In November 2021, the OECD established a Platform on Financing

Key Publications and website

Contact for more information

Green finance A number of countries have created official definitions of

and investment report on Developing Sustainable Finance Definitions and

The Clean Energy Finance and Investment Mobilisation

CEFIM programme activities